1 Executive Summary

2 The Opportunity for IP TV
2.1 The Competitive Video Market
2.2 Fiber and High Definition will Drive New IP TV Technologies
2.3 IP TV Mass Deployments Have Started
2.3.1 Asia Is Taking the Lead
2.3.2 Europe Is Active
2.3.3 The Small Telcos Are Leading the Way in North America
2.3.4 Limited Activity in the Rest of the World
2.4 Sophisticated New IP TV Service Strategies
2.4.1 Implementing Full Service Strategies
2.4.2 Innovative Pricing and Promotion Strategies
2.5 The IP TV Opportunity Is Real

3 New Developments in IP TV Technology
3.1 Access Technologies
3.1.1 ADSL2+ Will Enhance ADSL IP TV Services
3.1.2 VDSL Technology Still Addressing Standardization Issues
3.1.3 Fiber to the MDUs Is Important In Many Markets
3.1.4 BPON FTTP Technology Being Adopted in the U.S.
3.1.5 Gigabit PON Will be Significant in Asia
3.1.6 DSL Will Continue to Dominate IP TV
3.2 Advances in Video Compression Enabling IP TV
3.2.1 MPEG-2 Is Now a Mature Technology
3.2.2 MPEG-4 Is Needed for High Definition
3.2.3 Microsoft Is Making a Major Push with Windows Media 9
3.2.4 Future Direction of Codec Technology Is Toward Low Bit Rate Encoding
3.3 Key Technology Trends and Opportunities

4 The Strong Business Case for IP TV
4.1 The Business Case of IP TV over DSL Has Improved
4.2 IP TV Over Fiber Has an Attractive Business Case
4.3 The Actual Results from IP TV Deployments are Positive
4.3.1 IP TV Has Accelerated Profitability at FastWeb
4.4 PCCW Expects that IP TV Will Bring Strong Positive Results

5 Global Outlook for IP TV
5.1 Asia is Leading the IP TV Market
5.1.1 Dramatic IP TV Introduction in Hong Kong
5.1.2 Continuing Progress in Japan
5.1.3 IP TV in South Korea Has Been Limited by Regulation
5.1.4 IP TV Delayed in Taiwan
5.1.5 Activities in Other Asian Countries
5.2 Robust IP TV Activities in Europe
5.2.1 FastWeb is Showing the Way in Italy
5.2.2 France Telecom Aggressive IP TV Rollout
5.2.3 IP TV Paused in Spain
5.2.4 Germany and the UK Taking It Slow
5.2.5 Other Western European Countries Active
5.2.6 IP TV Activities Starting in Eastern Europe
5.3 Canada and the Small Independents Leading in North America
5.3.1 Canadian Telephone Companies Adopting IP TV
5.3.2 Small U.S. Independent Telcos Leading the Way
5.3.3 Large U.S. Incumbents Will Not Adopt IP TV
5.4 IP TV Emerging in the Rest of the World

6 Global IP TV Market Forecast Holding Steady
6.1 Global Forecast Shows Strong Growth
6.1.1 Global DSL Forecast Is Much Improved
6.1.2 IP TV Subscriber Forecast Remains Strong
6.1.3 Global System Revenue Forecast
6.1.4 Access System Revenue Forecast
6.1.5 Global Set-top Box Revenue Forecast
6.1.6 Global IP TV Headend Revenue Forecast
6.1.7 Global IP VOD Servers Revenue Forecast
6.1.8 Global IP TV Middleware Revenue Forecast
6.2 IP TV Market Forecast for Asia
6.2.1 DSL Subscriber Forecast for Asia
6.2.2 IP TV Subscriber Forecast for Asia
6.2.3 IP TV System Revenue for Asia
6.3 IP TV Market Forecast for Europe
6.3.1 DSL Subscriber Forecast for Europe
6.3.2 IP TV Subscriber Forecast for Europe
6.3.3 IP TV System Revenue in Europe
6.4 IP TV Market Forecast for North America
6.4.1 DSL Subscriber Forecast for North America
6.4.2 IP TV Subscriber Forecast for North America
6.4.3 IP TV System Revenue for North America
6.5 IP TV Market Forecast for the Rest of the World
6.5.1 DSL Subscriber Forecast for the Rest of the World
6.5.2 IP TV Subscriber Forecast for the Rest of the World
6.5.3 IP TV System Revenue for the Rest of the World

7 Future Trends and Drivers
7.1 Technology Trends and Drivers
7.2 IP TV Market Trends and Drivers

8 Opportunities, Risks and Recommendation
8.1 Opportunities
8.2 Risks
8.3 Recommendations
8.3.1 Recommendations for Service Providers
8.3.2 Access System Manufacturers
8.3.3 IP TV Systems Manufacturers and Software Providers
8.3.4 Investors

9 Appendices
9.1 Appendix I: Service Provider Profiles
9.1.1 All West Communications, Inc.
9.1.2 BellSouth Corporation
9.1.3 Chibardun Telephone Cooperative, Inc.
9.1.4 Cyprus Telecommunications Authority
9.1.5 FastWeb/e.Biscom
9.1.6 France Telecom
9.1.7 Iowa Network Services, Inc.
9.1.8 KDDI Corporation
9.1.9 Kingston Communications plc
9.1.10 MTS Communications, Inc.
9.1.11 Paul Bunyan Telephone Cooperative
9.1.12 PCCW
9.1.13 Qwest
9.1.14 Saskatchewan Telecommunications (Sasktel)
9.1.15 SBC Communications
9.1.16 Softbank Corporation
9.1.17 SureWest Communications
9.1.18 Verizon Communications
9.1.19 Vernon Telephone Cooperative
9.2 Appendix II: IP TV Access System Manufacturer Profiles
9.2.1 Advanced Fibre Communications, Inc.
9.2.2 Alcatel
9.2.3 Allied Telesyn
9.2.4 Calix
9.2.5 ECI Telecom Ltd.
9.2.6 Marconi Corporation
9.2.7 Net to Net Technologies
9.2.8 Occam Networks
9.2.9 Zhone Technologies
9.3 IP TV Set-top Box Manufacturer Profiles
9.3.1 Amino Communications, Ltd.
9.3.2 i3 micro
9.3.3 Kreatel Communications AB
9.3.4 Pace Micro Technology plc
9.4 IP TV Headend System Manufacturers
9.4.1 Envivio, Inc.
9.4.2 Minerva Networks
9.4.3 Optibase, Inc..
9.4.4 SkyStream Networks
9.4.5 Tandberg Television
9.4.6 Tut Systems
9.5 IP TV Video On Demand (VOD) Servers
9.5.1 Kasenna, Inc.
9.5.2 Movidis, Inc.
9.5.3 nCube Corporation
9.6 IP TV Video Middleware Providers
9.6.1 Microsoft Corp.
9.6.2 Myrio Corporation
9.6.3 Orca Interactive

Table of Figures

Figure 1-1: Global IP TV Subscriber Forecast
Figure 1-2: Global IP TV Subscriber Forecast
Figure 1-3: Global IP TV System Revenue
Figure 2-1: Comparing Satellite and Cable TV Services
Figure 3-1: Performance of ADSL2 vs. ADSL
Figure 3-2: ADSL2+ Can Double Maximum Downstream Data Rate
Figure 3-3: FTTP Physical Sub Networks
Figure 3-4: FTTP Network Architecture
Figure 3-5: FTTP Wavelength Allocation Plan
Figure 3-6: Full Build Deployment for FTTH
Figure 3-7: Example of FTTC Full Build Deployment
Figure 3-8: Service Overlay Architecture
Figure 3-9: Hybrid Architecture Employing FTTC and FTTH
Figure 3-10: Video Distribution Architecture
Figure 3-11: Insertion of Narrowcast Video Programming
Figure 3-12: Video Spectrum Allocation
Figure 3-13: Video Overlay
Figure 3-14: Simple SFU ONT Premises Network Interface
Figure 3-15: Complex SFU ONU Premises Network Interface
Figure 3-16: MDU ONT Premises Network Interface - Option 1
Figure 3-17: MDU ONT Premises Network Interface - Option 2
Figure 3-18: Functional Diagram of a Satellite Relay Feed
Figure 3-19: Fiber Home Gateway or Server
Figure 3-20: MPEG-4 Scene Using Multiple Objects and Elementary Streams
Figure 3-21: MPEG-4 Profiles and Levels
Figure 3-22: The Relationship of the Parts of MPEG-4
Figure 4-1: Breakeven Point for DSL-based IP TV Services
Figure 4-2: Breakeven Points for FTTP IP TV Deployments at 100% Penetration
Figure 4-3: Breakeven Points for FTTP IP TV Deployments Based on Penetration
Figure 4-4: FastWeb Broadband Subscribers
Figure 4-5: FastWeb IP TV Subscribers
Figure 4-6: FastWeb's Residential Broadband ARPU
Figure 4-7: FastWeb's Residential IP TV ARPU
Figure 6-1: Global DSL Subscriber Forecast
Figure 6-2: Global IP TV Subscriber Forecast
Figure 6-3: Global IP TV Revenue Forecast
Figure 6-4: Global IP TV System Revenue Forecast
Figure 6-5: Global IP TV Access Revenue Forecast
Figure 6-6 Global Forecast for IP TV Set-top Boxes
Figure 6-7: Global IP TV Revenue Forecast
Figure 6-8: Global IP TV VOD Server Forecast
Figure 6-9: Global IP TV Middleware Revenue Forecast
Figure 6-10: Asian DSL Subscriber Forecast
Figure 6-11: Asian IP TV Subscriber Forecast
Figure 6-12: IP TV System Revenue Forecast in Asia
Figure 6-13: DSL Subscriber Forecast for Asia
Figure 6-14: IP TV Subscriber Forecast for Europe
Figure 6-15: IP TV System Revenue Forecast for Europe
Figure 6-16: DSL Subscriber Forecast for North America
Figure 6-17: IP TV Subscriber Forecast for North America
Figure 6-18: IP TV System Revenue Forecast for North America
Figure 6-19: DSL Subscribers in the Rest of the World
Figure 6-20: IP TV Subscriber Forecast for the Rest of the World
Figure 6-21: IP TV System Revenue for the Rest of the World
Figure 9-1: FastWeb Broadband Subscribers
Figure 9-2: FastWeb IP TV Subscribers
Figure 9-3: FastWeb's Residential Broadband ARPU
Figure 9-4: FastWeb's Residential IP TV ARPU
Figure 9-5: MaLigne TV Network Architecture
Figure 9-6: SureWest's IP TV Network Architecture
Figure 9-7: AFC's IP TV Architecture
Figure 9-8: Calix C7 IP TV Architecture
Figure 9-9: Zhone Technologies' IP TV Architecture
Figure 9-10: Envivio's IP TV Architecture
Figure 9-11: Envivio's Middleware Architecture
Figure 9-12: SkyStream's Video Distribution Architecture
Figure 9-13: SkyStream's IP TV Distribution Architecture
Figure 9-14: Microsoft's IP TV Architecture

Table of Tables

Table 3-1: Summary of ONT/ONU Types
Table 3-2: Microsoft Codec Compression Comparaison
Table 3-3: Microsoft Windows Media 9 Encoder Options
Table 3-4: Microsoft Codec Licensing Comparison
Table 3-5: Microsoft Container Licensing
Table 4-1: Fiber Construction Projects
Table 5-1: Global IP TV Service Providers
Table 9-1: IP TV Service Provider Profiles
Table 9-2: All West Communications’ Digital Video Service Deployment
Table 9-3: All West Communications’ IP TV and DSL Packages
Table 9-4: All West Communications’ Digital video Partners
Table 9-5: BellSouth's Fiscal 2003 Financial Results (Normalized)
Table 9-6: BellSouth's Cable Competition (2002)
Table 9-7: Age of BellSouth's Lines
Table 9-8: Chibardun Telephone’s IP TV Services
Table 9-9: Chibardun Telephone’s Digital Video Service Packages
Table 9-10: Cyprus Telecommunications Authority's 2002 Financial Results
Table 9-11: miVision Monthly Pricing
Table 9-12: CYTA's Trial TV Channels Offered
Table 9-13: e.Biscom's Fiscal 2003 Financial Results
Table 9-14: FastWeb's IP TV Offerings
Table 9-15: France Telecom's Fiscal 2003 Financial Results
Table 9-16: France Telecom's IP TV Pricing
Table 9-17: TPS L Channel Lineup
Table 9-18: France Telecom's IP TV Technology Partners
Table 9-19: Iowa Network Services IP TV Technology Partners
Table 9-20: KDDI's Fiscal 2003 Financial Results
Table 9-21: KDDI Hikari Plus Service Fees
Table 9-22: Hikari Plus Net Technical Characteristics
Table 9-23: Hikari Plus Basic Channels
Table 9-24: Hikari Plus Serving Areas
Table 9-25: Kingston Communications' Fiscal 2003 Financial Results
Table 9-26: MTS’ Fiscal 2003 Financial Results
Table 9-27: MTS Communications IP TV Service Deployments
Table 9-28: MTS IP TV Coverage in Winnipeg
Table 9-29: MTS IP TV Theme Groups
Table 9-30: MTS IP TV Service Pricing
Table 9-31: MTS Triple Play Bundles
Table 9-32: PCCW's Fiscal 2003 Financial Results
Table 9-33: PCCW's NETVIGATOR ADSL services
Table 9-34: PCCW's Premium Channels
Table 9-35: Qwest's Fiscal 2003 Financial Results
Table 9-36: Cable Competition in Qwest's Territory
Table 9-37: Age of Access Lines in Qwest's Network
Table 9-38: Sasktel's Fiscal 2002 Financial Results
Table 9-39: Sasktel's IP TV Packages
Table 9-40: SBC's Fiscal 2003 Financial Results
Table 9-41: SBC's Cable Competition
Table 9-42: Age of Access Lines in SBC's Network
Table 9-43: Softbank's Fiscal 2003 Financial Results
Table 9-44: Softbank’s Installed Base – December 2004
Table 9-45: BB Cable TV Pricing
Table 9-46: Softbank's Channel Line Up
Table 9-47: SureWest's Fiscal 2003 Financial Results
Table 9-48: SureWest Communications’ Digital Video Service Deployment
Table 9-49: SureWest's Triple Play Bundles
Table 9-50: SureWest Communications’ Digital video Partners
Table 9-51: Verizon's Fiscal 2003 Financial Results
Table 9-52: Verizon Freeedom with DirecTV Package
Table 9-53: Cable Competition in Verizon's Territory
Table 9-54: Age of Access Lines in Verizon's Network
Table 9-55: IP TV Service Provider Profiles
Table 9-56: AFC's Fiscal 2003 Financial Results
Table 9-57: AFC's IP TV Products
Table 9-58: AFC's IP TV Deployments
Table 9-59: Alcatel's Fiscal 2003 Financial Results
Table 9-60: Alcatel's IP TV Products
Table 9-61: Alcatel's IP TV Deployments
Table 9-62: Alcatel's IP TV Technology Partners
Table 9-63: Allied Telesyn’s IP TV Products
Table 9-64: Allied Telesyn’s IP TV Deployments
Table 9-65: Allied Telesyn’s IP TV Technology Partners
Table 9-66: Calix’s IP TV Products
Table 9-67: Calix's IP TV Deployments
Table 9-68: Calix's IP TV Technology Partners
Table 9-69: ECI Telecom's Fiscal 2003 Financial Results
Table 9-70: ECI Telecom's IP TV Products
Table 9-71: ECI Telecom's IP TV Deployments
Table 9-72: ECI Telecom's IP TV Technology Partners
Table 9-73: Marconi's Calendar 2003 Financial Results
Table 9-74: Marconi's Current Assets as of December 31, 2003
Table 9-75: Marconi's Video Access Products
Table 9-76: Marconi’s IP TV Deployments
Table 9-77: Marconi's IP TV Technology Partners.
Table 9-78: Net to Net Technologies’ IP TV Products
Table 9-79: Net to Net's IP TV Deployments
Table 9-80: Net to Net's IP TV Technology Partners
Table 9-81: Occam Network's Fiscal 2003 Financial Results
Table 9-82: Occam Networks’ Video Products
Table 9-83: Occam Network's Video Deployments
Table 9-84: Occam Network's Video Technology Partners
Table 9-85: Zhone Technologies’ Fiscal 2003 Financial Results
Table 9-86: Zhone Technologies' IP TV Products
Table 9-87: Zhone's IP TV Technology Partners
Table 9-88: IP TV Service Provider Profiles
Table 9-89: Amino Communications' IP TV Products
Table 9-90: Amino Communications' IP TV Global Deployments (Feb ’04)
Table 9-91: Amino Communications' IP TV Deployments
Table 9-92: Amino Communications' IP TV Technology Partners
Table 9-93: i3 micro's IP TV Products
Table 9-94: i3 micro's IP TV Deployments
Table 9-95: i3 micro’s IP TV Technology Partners
Table 9-96: Kreatel’s IP TV Products
Table 9-97: Kreatel’s IP TV Deployments
Table 9-98: Kreatel's IP TV Technology Partners
Table 9-99: Pace Micro Technology's 2003 Financial Results
Table 9-100: Pace Micro Technology's IP TV Deployments
Table 9-101: Pace Micro Technology's IP TV Partners
Table 9-102: IP TV Service Provider Profiles
Table 9-103: Envivio's IP TV Products
Table 9-104: Minerva Networks Product Offerings
Table 9-105: Deployment of Minerva Network Systems
Table 9-106: Optibase's Fiscal 2003 Financial Results
Table 9-107: Optibase's IP TV Customers
Table 9-108: Optibase's IP TV Technology Partners
Table 9-109: SkyStream's IP TV Products
Table 9-110: SkyStream's IP TV Deployments
Table 9-111: SkyStream's IP TV Technology Partners
Table 9-112: Tandberg Television's Fiscal 2003 Financial Results
Table 9-113: Tandberg Television IP TV Products
Table 9-114: Tandberg Television's IP TV Customers
Table 9-115: Tandberg Television's Technology Partners
Table 9-116: Tut Systems' 2003 Financial Results
Table 9-117: Tut Systems 2003 Deployments
Table 9-118: Tut Systems’ IP TV Technology Partners
Table 9-119: IP TV Service Provider Profiles
Table 9-120: Kasenna's IP TV Products
Table 9-121: Kasenna's IP TV Systems
Table 9-122: Kasenna's Service Provider Deployments
Table 9-123: Movidis’ VOD Products
Table 9-124: Movidis' Technology Partners
Table 9-125: nCube’s IP TV Products
Table 9-126: nCube’s IP TV Deployments
Table 9-127: nCube’s IP TV Partners
Table 9-128: IP TV Service Provider Profiles
Table 9-129: Microsoft's Fiscal 2003 Financial Results
Table 9-130: Microsoft's IPTV Products
Table 9-131: Microsoft's Announced IPTV Trials
Table 9-132: Microsoft's IPTV Technology Partners
Table 9-133: Myrio's IP TV Products
Table 9-134: Myrio's IP TV Customers
Table 9-135: Myrio’s IP TV Technology Partners
Table 9-136: Orca Interactive's Fiscal 2003 Financial Results
Table 9-137: Orca Interactive’s IP TV Deployments
Table 9-138: Orca Interactive’s Technology Partnerships