Videotelephony set to take off in Europe

June 20, 2006

Usage of personal videocommunications devices and services is set to take off in Western Europe, according to a new report, Creating a Mass Consumer Market for Videotelephony: opportunities and challenges, published by Analysys, the global advisers on telecoms, IT and media. By 2010, Analysys forecasts that household penetration of fixed videocommunications applications and services will have reached 32%, and 11% of the adult population will be using mobile videotelephony.

A second generation of broadband means that the technological barriers to large-screen broadband videocommunications are coming down but the report warns that telecoms operators (TOs) will have difficulty translating an increasingly popular application into service revenue.

"A lot of simple voice revenue is being lost by TOs to Internet calling applications such as Skype, and broadband videotelephony may go the same way," says Martin Scott, co-author of the report. "One way for operators to create value out of videotelephony is to tie it to their roll-out of Internet television (IPTV) services. User-generated content is the logical extension of the explosion of content that IPTV promises and the TV screen may be a simpler option than stand-alone devices."

Key findings from the new report include:

-- Broadband operators should not dismiss the potential of videotelephony: usage of videocommunication applications is growing very fast and it is a logical fit for operators whose core business is one-to-one communications

-- Operators should consider launching videotelephony as part of a range of services in an IPTV triple play

-- Mobile videotelephony's ergonomic complexity means that its usage levels may never be as high as broadband's, even with the higher quality afforded by 3.5G

-- While 30% of 3G users in the UK had tried videotelephony, the impact of mobile videotelephony on service revenue has been minimal.

This report discusses the outlook for videotelephony over broadband and mobile networks. It examines the lessons to be learnt from the success or failure of services to date and reviews key aspects of user behaviour. The report includes reviews of technologies and standards for compression and quality of service, and provides forecasts for videotelephony service and device revenues in 16 Western European markets.