I just finished breezing through a recent (28/2/08) Yankee Group Research report titled “From Gorillas to Guerillas, IPTV Changes Everything” that concludes IPTV will redefine pay TV in the United States (note: you can download the report for free but just register online).

Okay, I can dig it. Sure, why not…localization is what it’s all about. But that’s not what got me thinking about today’s blog, rather it was the following snippet from Yankee:

“…phone services used to be mass market, available nationwide. IPTV creates a new market dynamic by fragmenting the services market in the US. Every market will have a different set of competitors. As a result the United States is becoming a nation of hyper-competitive micro-markets. This transition fundamentally changes the market dynamics for all service providers, forcing them to convert from centralized, dominating gorilla to small, responsive guerrillas.”

Is it me or is China’s telecom (and Internet) market going in the opposite direction? Indeed, the theme in China is consolidation (read: monopoly).

Now, consolidation is very different from offering a nationwide service, for example a company that manages a nationwide branded hotel chain (offering consistent service quality) is very different from there being only one company providing nationwide lodging facilities. The former is a good thing while that latter is not, yet the latter is what’s rolling down the pipe in China – especially, in the telecom/Internet space.

So, what do we got? Well, here are a few:

Tencent/QQ = chat
China Mobile = mobile
Shanda = games

Odds favour IPTV will go the same way. One company is going to get the lion share of the market and that company may be Tencent…or even China Mobile.

Anyhow, thought this was an interesting observation…