China will soon be the largest IPTV market in the world, boasting 1 million subscribers by the end of 2007, says Co-Founder Ying Wu of China-based UTStarcom, according to TelephonyOnline.

According to Wu, IPTV has dodged the five major barriers in China: regulation, technology, content, infrastructure and capital. Though highly regulated, the Chinese government mandated that the country's approximately 2,200 local cable operators be separated from government fuctions.

UTStarcom alone now has 100,000 subscribers.

One challenge lies in funding content when users can fast-forward through ads on IPTV. Vendors hope to address this issue with profile-based targeted advertising.

Contrary to the case in most countries, Chinese telecoms have more money and better infrastructure than cable operators, allowing for better streaming and lower rates for subscribers - around $4 for basic service.

UT Starcom is China's leading telecom hardware vendor.