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Many have expected that the IPTV rollouts by major telecom companies, including Verizon and AT&T, would begin to harm cable companies in 2005. But that hasn't happened yet, according to this Red Herring article.

Cable companies have in fact been able to maintain core business revenues while taking voice customers away from telecoms with a strong marketing push for Voice over IP services bundled with cable and Internet service (triple-play bundle). At the end of the third quarter, cable company voice service was available to 48.6 million households, a 27 million increase over the year before, according to the article.

For telecom IPTV providers, the failure to begin taking cable customers has mostly been because of delays in laying down the infrastructure and dealing with legal issues such as franchise rights from state to state. But when this all comes together and IPTV is ready for prime time, cable companies will have something to worry about. This will slowly happen over the next two years and beyond, meaning that cable companies have this amount of lead time to develop interactive and personalization features to compete with IPTV—both to entice consumers and to attract advertisers with the acute targeting capabilities that IP-based technologies possess.

It will be an interesting area to watch.

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