• by Wayne Friedman , July 18, 2011

So-called "Over The Top" Internet-driven video services are causing bandwidth problems for telcos and IPTV services.

Austin-Tx-based IMS Research estimates bandwidth use for telcos and IPTV services was at 44% capacity at the end of 2010. This will move up to 50% between 2010 and 2015.

Growing OTT services -- video services that use an Internet/fiber-optic connection -- will total $32 billion in revenues over the next five years, and will be a major feature of IPTV services for pay TV content.

"What we have now is a situation where the telcos are actively seeking solutions to optimize bandwidth," says analyst John Kendall in a release. "OTT is here to stay, and the telcos have accepted that."

Paul Erickson, analyst with IMS Research's Consumer Electronics Group, adds: "These new devices are forecast to supplant game consoles as the dominant OTT video client over the next few years."

IMS Research warns that bandwidth congestion challenges are greater in countries with lower broadband penetration. IMS Research expects Eastern European and Latin American DSL providers to struggle acutely with video-generated congestion issues.

One key example: In 2010, France had peak potential bandwidth demand at just over 37% of network capacity. But it will rise to nearly 60% by 2015, mainly due to OTT and multiscreen video.