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May 17, 2007
IPTV Drives M&A Surge?
Along with my IPO resurgence thesis, one of my favorite 2007 themes is the Return o' Telecom, or at least of some parts of that broken business. Further food for thought on that theme comes from a new iSuppli report predicting an M&A "surge" in IPTV-related gear.Communications infrastructure equipment OEMs are engaging in a spate of Mergers and Acquisitions (M&A) in order to restructure themselves into one-stop shops that can sell the telcos everything they need to compete in the booming Internet Protocol Television (IPTV) market, according to iSuppli Corp.While IPTV has myriad critics -- Andrew? -- there seems little doubt that there will be continuing company-buying this year by panicky infrastructure OEMs.At stake for these OEMs is a market for IPTV telco equipment that is expected to grow to $22.1 billion in 2011, up from $9 billion in 2007. The attached figure presents iSuppli’s forecast of worldwide telco spending on IPTV equipment.
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You don't sell many research reports when you predict a flat market.
I have no idea where they get 8-9B in IPTV equipment. They must be counting DSLAMs and PON hardware to get that high, and those systems are independent of IPTV.
Just take the Capex of AT&T and the few other carriers deploying IPTV and you'll see this chart is BS.
Andrew -- I knew you'd like it :-)
Like you, I have a hard time figuring where the top line number comes from. I sure don't see $9b out there in the market today.
It blows my mind that these dimwits at the telcos think that IPTV will ever go anywhere. Why would I ever limit myself to the content providers they've struck deals with, when I can now download video from anybody in the world over the same pipes (through the data connection)? I can always schedule a download overnight and watch it tomorrow. Why would I ever need to stream, other than for live events like sports that I have to watch in real-time? Streaming video/IPTV is a huge boondoggle for the bandwidth providers. They need to be enlightened before they dump a whole bucketload of money into that pit.
panicky indeed. Buffett didn't look panicked in buying railroads over the last year. there is a lesson there. but its obscured by bubble (web) 2.0.