A new report from SNL Kagan cautions that the take rates for telco video services through 2011 will be modest.
The report, “Telco TV Outlook,” finds that while the outlook for telco video services may seem less than promising, the five-year home penetration rate is expected to be in line with the initial results posted by digital cable and satellite services.
Forecasts show take rates for fiber-to-the-home will exceed those using fiber-to-the-node architectures coupled with DSL technology. Verizon has adopted a fiber-to-the-home strategy, while AT&T has gone with fiber-to-the-node.
According to SNL Kagan senior analyst Ian Olgeirson, speed to market and the cost of upgrading infrastructure to deliver video will restrain telcos from grabbing “much larger chunks of the market in the foreseeable future.” Another factor gating the entrance of telcos into the video services market is the competitive disadvantages in terms of cost and scope that they face in compiling programming packages.