Frost & Sullivan (News - Alert) recently released a new report which showed that the Latin American Pay TV Services Markets, which earned $15.23 billion in 2011, should hit the $28.75-billion mark in 2017.

In a statement, Frost & Sullivan Research Analyst Guilherme Faggion said that, "The entrance of telecommunications companies will intensify competition in the market. The emergence of IPTV services in all the countries in Latin America; the launch of hybrid DTH, IPTV (News - Alert), and digital terrestrial television set-top-boxes; as well as the deregulation of cable TV in Brazil are likely to solidify this trend."

The expanding geographic reach of Pay TV service by both cable TV and direct-to-home (DTH) operators will help drive the Latin American Pay TV services market to a greater degree of competitiveness. With competition among cable TV and DTH operators, and Internet protocol TV (IPTV) operators serving customers within countries such as Brazil, Chile, Colombia and Mexico on the rise, the availability and quality of services is set to further improve not just in urban areas, but across underserved small and medium-sized cities.

The low income group in particular is seen as a potentially lucrative segment, as there has been an increase in Pay TV services subscriptions within this segment.   

Another reason why subscribers are keen on adopting Pay TV services is because of the availability of bundles that include TV, fixed, mobile telephony and broadband. However, in Brazil, where there is a heavy tax burden on Pay TV services and a cap on return on investment (ROI) from deployment of networks in distant geographic areas and small cities, operators find it difficult to provide convergent services over networks.

At present, the over the top (OTT) market does not present any threat to the industry. But as quality of broadband offerings, applications featuring attractive content for the Latin American market, and installed base of video games improves, this trend may change.