Telcos either expanding their IPTV offerings or jumping into the video market are generating a boom in demand for headend systems that has already begun and which should persist through at least the next four years, according to a new report from In-Stat.
Over the last two years, several telcos have already built a large number of headends, creating a market for and driving down the cost of H.264 compression equipment, which has prompted telcos that were waiting to move forward with deployment plans, according to In-Stat.
The research firm expects up to 800 headends to be built between 2005 and 2010. Upgrades to take advantage of technology advances will further fuel the boom. The total telco TV headend revenue opportunity will reach $869 million in 2010.
“Much of the near-term upgrade revenue will come from telcos that are adding HD channels to their existing SD channel lineup,” says Michelle Abraham, In-Stat analyst, in a statement. “In 2009 and 2010, we expect telcos to replace equipment that is 4 to 5 years old, as compression algorithms will have improved to make the bandwidth savings worth spending the money.”
In-Stat said headends are built today mainly to pass through video streams, but that will change as telcos deploy technology that will allow them to perform personalizing functions such as ad insertion.
In-Stat’s “Telco TV Headends: A Booming Business,” is $3,995.
