By Adrian Pennington

It’s no secret that telecom operators are making significant moves into the TV industry. Indeed, telcos now provide around a fifth of pay-television subscriptions worldwide. According to figures from Ovum, operations owned or controlled by telcos accounted for 140 million retail pay-TV customer connections globally at the end of 2014. This rose to 177 million during 2015, which is 19 per cent of the total pay-television subscriber base.

Ovum analyst Jonathan Doran comments: “The growing share of ‘traditional’ TV platforms within the telco TV base reflects a recent shift towards a global consolidation of pay-TV operations, in which telcos are playing a significant part.”

Following a number of false starts in Western Europe, IPTV homes are now viable platforms. With growth of 30 per cent expected between now and 2019, IPTV subscribers will outperform both cable and satellite which will see a decline in subscribers of 9 per cent and growth of 6 per cent respectively, finds FutureSource Consulting. In the US, IPTV households reached over 12 million at the year of end 2014, representing 13 per cent of pay-TV households with an expected rise to over 15 per cent by 2019.

The staggering $49 billion acquisition of satellite television provider DirecTV by AT&T last year is proof of telco power. At one swoop it became the U.S' largest pay TV provider, with more than 26 million total subscribers (20 million from DirecTV and about 6 million from AT&T’s native U-Verse service).

Rival Verizon operates America's largest 4G LTE network and is betting on video to drive its business. It paid $4.4 billion to acquire broadband infrastructure from AOL and launched mobile-only video app Go90 fuelled by content including multichannel (youth oriented) network Awesomeness TV for which it paid DreamWorks $159m for a 24 percent stake.

Telcos are taking large chunks of the pay-TV market, becoming MVPDs [multichannel video programme distributors]. It’s easy to see why. Consumers are now streaming more content on demand than ever before, enabled by superfast broadband and 4G. Consumers are streaming more on-demand TV series and programmes , watching six hours of premium shows a week, an increase of 121 per cent since 2011, according to Ericsson Consumer Lab.

That research also found that 61 per cent of consumers now watch video content on their smart phones. If service providers are smart with their bundled propositions, this could prompt an ever-increasing usage of data.

UK quad play

Bundled propositions are the name of the game in the mature European markets where traditional and telco media are jockeying to offer the quad mix of TV, mobile, broadband and landline in an effort to increase customer loyalty and spending. Orange, T-Mobile and Telefonica are all making moves in their respective key markets to offer quad play services. Arguably, given the trend to TV everywhere, it is mobile which will prove to be the most important of these services.

In the UK, BT, Sky, TalkTalk and Virgin Media are bidding to offer quad play. BT, the former state-owned telecoms provider, has spent the last few years investing heavily for a connected and converged future. It is spending $8.6 billion upgrading mobile and broadband speeds over its fibre to the home network following its $2.8bn merger with mobile operator EE last year which saw it take on 25 million customers. It also spent more than $2.8bn on sports rights – mainly for English Premier League and UEFA Champions League soccer – to entice subscribers to a BT Sports TV package. It launched the world's first 4K live channel a year ago and is reportedly preparing to expand into original drama and documentary content.