IPTV delivers standard and high-definition video over IP by using advanced compression technologies like MPEG-4 (H.264) and can bundle other IP-based communications such as VOIP into 'triple play' or converged services.

Current compression rates allow broadcast quality to be maintained for about half the size with standard definition requiring about 2Mbps and 8 to 10Mbps for high-definition. Analysts argue that while broadband adoption rates are high within the enterprise, the data consumption required for IPTV results in expensive bandwidth costs, which increases as more devices feed into the technology.

Telsyte managing director Warren Chaisatien said while end-user hardware is capable of handling IPTV and broadband adoption is increasing, data bandwidth pricing coupled with Australia's slow uptake of technology could hold it back five to six years.

"While broadband infrastructure is available, the costs of residential broadband could create a bottleneck by holding back adoption rates to over five years," Chaisatien said.

"I wouldn't say adoption is constrained by [end-user] hardware, however the pricing model for broadband bandwidth is a restraint."