World leading communications solution provider Siemens will launch a massive campaign to tap into the business of digital television over the Internet, known as IPTV, in the Chinese market.

Senior executives announced here on Wednesday that the German company will enhance its investment and research and development capabilities to develop and localize its IPTV technology and services in order to better meet the needs of local customers.

"IPTV will be the core of our future business," said Norbert Muhrer, president and chief executive officer of Siemens Communication Networks Ltd Beijing, a Sino-German joint venture formerly focused on switching systems and solutions.

Muhrer said that his company is well prepared to expand its IPTV solution in the Chinese market and negotiations with more partners are under way.

"China is one of the largest IPTV markets in the world," said Andreas Mueller-Schubert, president of Fixed Networks Solution of Siemens Communications Group, Siemens AG.

China is among the first in the world to put IPTV services in commercial trial operation, he added.

Statistics show that there are 360 million TV viewers and 25 million broadband users in the Chinese mainland, creating a huge potential for development of IPTV services.

"We are very optimistic about the Chinese IPTV market," Mueller-Schubert said at a live demonstration of IPTV services held in Shanghai.

Siemens' confidence is boosted by the success of the trial commercial operation of its home entertainment solution in collaboration with Shanghai Telecom Co, a local wireline operator, and Shanghai Media Group, the first IPTV licence holder in the Chinese mainland.

The trial commercial operation was carried out in August this year in Shanghai's Pudong district, covering 5,000 households. Through the home entertainment solution, the households are able to enjoy digital television programmes over the Internet.

IPTV services in Shanghai offer customers video on demand, live TV services, network-based personal recorder, time shifted TV, Internet surfing, online gaming and information via TV.

At the same time, rapid development of IPTV also offers network operators enormous growth opportunities to compensate for declining income from conventional telephony business, potentially boosting average revenue per user.

A small-scale survey conducted by Siemens shows that Chinese TV households are willing to pay about 120 yuan (US$15) per month for IPTV services, similar to the monthly payment of ADSL (a technology for transmission of high bit-rate services over ordinary phone lines) services from telecom operators.

Market researchers predict that IPTV usage will soar, especially in China in connection with the Beijing 2008 Olympic Games.

More application and mature technology are expected to push the number of subscribers to 4.5 million and generate set-top box revenues of about US$231 million in the coming few years.

(China Daily December 23, 2005)