U.S. IPTV makes some inroads, but international ops continue to dominate

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IPTV is tough if you're a hardened jingoist. How can you wave a flag and chant USA!, USA! when the majority of IPTV activity is taking place outside the United States?

Of course, this doesn't mean all IPTV is happening everywhere but here. AT&T's (NYSE: T) multi-billion-dollar infrastructure buildout plan is certainly welcome news for those Americans who want to see someone, anyone compete with incumbent cable and satellite operators. But it's tempered a bit by the impression that the carrier seems more excited about 4G LTE wireless than U-verse IPTV, according to the news release.

Wireless: "AT&T plans to expand its 4G LTE network to cover 300 million people in the United States by year-end 2014, up from its current plans to deploy 4G LTE to about 250 million people by year-end 2013," the release stated.

Wireline: "AT&T plans to expand U-verse (TV, Internet, Voice over IP) by more than one-third or about 8.5 million additional customer locations, for a total potential U-verse market of 33 million customer locations."

To be fair, the wireless footprint is nationwide, while wireline only goes into AT&T's territories, but really, 300 million to 33 million sounds like a Temple football score.

Still, considering that the vast majority of IPTV news still comes from overseas--Korea, for instance, just hit 6 million subscribers; TalkTalk in the U.K. is signing up 1,000 subscribers per day; and Swisscom is gearing up for battle with its cable competitors, among just a few noteworthy examples--the AT&T announcement is heartening, as is news that CenturyLink (NYSE: CTL) is planning to soft launch in Phoenix and grow from there.

"Our Prism TV service represents a very compelling entertainment alternative to cable," Glen Post, CenturyLink's president and CEO said during an earnings call, noting that in the "eight markets where it is currently available, it continues to perform well."

Eight markets.

CenturyLink added "over 10,000 Prism TV subscribers" during the third quarter and now has 104,000 subscribers," Post said. About 55 percent of those additions are new customers to CenturyLink, which seems to indicate that the telco will continue to push ahead into the IPTV space because it's attracting new subscribers.

Still, it becomes less heartening to hear that the Prism TV penetration rate is only a little more than 10 percent across those eight markets.

Perhaps the problem is perception; perhaps it's definition, because IPTV, after all, is hardly a set-in-stone technology; perhaps--and more likely--it's a problem of the uphill battle operators face competing with an established cable infrastructure as opposed to their international competitors who are essentially plowing new ground in a green field. Whatever it is, the U.S. IPTV market is certainly less exciting--at least on paper--than the international market, where a company like America Movil can become the top pay TV operator in Latin America with 11.3 million subscribers, or 22 percent of the entire 51 million pay TV universe.

USA! USA! Not yet. -Jim

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