Alcatel sees 100 mln TV Internet clients by 2010

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French telecoms equipment group Alcatel on Tuesday said it expected subscribers to Internet-based TV to reach 100 million by late 2010, up from 3 million now, but admitted some operators were delaying roll-out.

Internet Protocol-based TV (IPTV) is one of the latest initiatives pushed by fixed-line telecoms operators to help boost revenues dented by free or cheap Internet telephony and desertion of traditional landlines for mobile communications.

"I think there will be about 100 million subscribers to IPTV by 2010," Michel Rahier, head of Alcatel's fixed communications division, told the Broadband World Forum in Paris.

He made the statement after admitting some operators had delayed the launch of Internet-based TV services to customers, partly due to technical glitches.

"Sometimes there is over-optimism in terms of maturity of the product," Rahier said.

"Yes, we have seen in a number of cases, roll-outs that were slower than some service providers had anticipated...Everybody is learning a lesson. They did not focus enough on the integration of the underlying infrastructure."

Bottlenecks of IPTV systems include the time needed to switch channels, which can be several seconds, and the speed requirements of broadband networks to guarantee a good picture.

Alcatel is in the final stages of clearing its merger with U.S. rival Lucent planned by the end of the year.

After meeting IPTV suppliers and operators in recent weeks, the investment bank Goldman Sachs wrote in a note earlier this month that IPTV roll-outs outside North America appeared to have stalled and were unlikely to regain momentum before 2008.

The bank also noted that the take-up of IPTV remained relatively low in Taiwan and several European countries such as France, Spain and Italy.

By June 30, France Telecom had 306,000 subscribers to its ADSL TV digital service, while Iliad had 273,000 subscribers of at least one Internet-based video service.

"Massive capacity requirements for millions of IPTV users appear to be less certain than before," Goldman Sachs said.

Operators like BellCanada have delayed the roll-out of IPTV "due to unsatisfactory level of customer experience during installation." AT&T was more enthusiastic about the service but also expressed concern about installation time, Goldman said.

The introduction of IPTV services have in part been driven by the recent launch of video on demand services that allow consumers to download programs and films directly from the Internet.

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