China Netcom (CNC), the second largest fixed line telephone carrier in China"s mainland, is operating IPTV business in Harbin, capital of Heilongjiang, northeastern China, by joining hands with Shanghai Media Group (SMG), the leading media company in Shanghai.

Currently its IPTV users in Harbin have hit 70,000 households and is expected to increase to 100,000 ones at the end of this year, disclosed a CNC executive.

By now, CNC has launched the trial operation of small- scaled IPTV in 21 cities across China. It will back distance education to communist party members in rural areas in Henan, central China, which will raise its IPTV users by 80,000 households.

Zuo Feng, general manager of CNC"s broadband Business Unit, said that CNC will expand its trial IPTV network to another five cities this year. It will launch the trial AVS IPTV project in Dalian, a coastal and economically fast growing city in Liaoning, northeastern China.

In the Dalian project, CNC will replace the H.264 standard with AVS (Audio Video Coding Standard), the homegrown source coding-decoding standard, which will cut back the IPTV carrier"s expenditure in patent.

The carrier will restart the IPTV project in Beijing. In June, its branch in the city started the IPTV operation in ten residential areas, but was blocked by broadcast and TV regulators.

Zuo Feng explained that this is because of not fluent communication between the branch and relative regulators. But he stressed that IPTV is advantageous to both the telecom and broadcast and TV industries and they would re-launch such a project.

IPTV is believed to be a key profitable part for telecom operators. CNC has a broadband strategy named CNCMIX, which is specializing at offer video and data services in TV sets, PCs and mobile phones.

Its strong rival China Telecom, the largest fixed-line telecom operator in China, is operating its trial IPTV network in 23 cities nationwide.

Its branch Shanghai Telecom has deployed the RollingStream end-to-end IPTV in Shanghai partnering with SMG. They plan to increase the number of Internet TV users in the city to between 80,000 and 100,000 by the end of this year.

Zuo Feng said there are 400 million TV viewers and more than 70 million broadband users in China, and a combination of Internet and traditional TV will bring huge profits to telecom carriers.

IPTV is such a combination to pipe content to TV sets through a broadband Internet connection. It provides 62 channels, more than traditional terrestrial television, and some entertainment programs.

IPTV users monthly pay CNY 60, or CNY 30 in case that they are already broadband subscribers. They need to pay more for interactive programs they order.

Industry analysts thought that IPTV"s programs are not rich enough to attract users to pay more, and some are even not fluent in video and audio. IPTV will have much difficulty in increasing users shortly and rapidly, they predicted.

Telecom carriers" expansion in IPTV is curbed by the State Administration of Radio, Film and Television, the top body to issue relative licenses. So far only some under the administration"s wing, like SMG and CCTV, gained IPTV licenses. Telecom carriers have to seek cooperation with licensed IPTV operators now.

(source:SinoCast)