Australian Internet Service Providers should embrace Internet Protocol Television and collaborate with each other to offer IPTV as it will become a killer application in the new National Broadband Network (NBN) environment, according to research company IDC.

IDC claims that IPTV, the broadcast of digital audiovisual content using Internet Protocol, offers massive potential for ISPs to increase their average revenue per user and reduce customer churn.

IDC’s latest white paper, sponsored by telecommunications company Ericsson, says that if the Federal Government’s NBN plans come to fruition all ISPs will have an equal footing in relation to access speed and reach, and current ISP business models based on access and download quotas will suffer reduced margins.

“The NBN may effectively level the playing field for many BSPs [Broadband Service Providers], requiring a higher degree of service differentiation rather than simply competing on price”, said Kursten Leins, marketing manager for Ericsson.

IDC estimates that Australia had around 43,000 IPTV subscribers at the end of 2007 and will have slightly less than 1 million by the end of 2012.

“A collaborative approach to the deployment of IPTV in Australia via a separate white label or wholesale entity will prove far more successful than a fragmented approach where each BSP attempts to scope, build, deploy and manage their own IPTV solution”, says David Cannon, IDC Australia's telecommunications program manager.

South Australian ISP Internode recently revealed it was testing platforms for delivery of IPTV services as well as negotiating with content providers and was expecting to offer the new services in 2009.