IPTV or Internet Protocol Television is a system where digital television is delivered to the end user using the Internet Protocol. It relies on the same technologies that are used for computer networks and adds new possibilities, such as video on demand, on top of the traditionally broadcasted TV. Video content for IPTV is typically compressed using a MPEG-2 or H.264 (MPEG-4 part 10) compression and sent in an MPEG-2 transport stream over IP. Since TV is a "real time service" packets are delivered using a simple unreliable transmission model and packets may arrive out of order or be lost. Lost packets are normally not re-transmitted since they anyhow would arrive too late to be useful and packet loss will thus decrease perceived quality for the end user. The Master thesis is an investigation of the parameters that affect the perceived quality in MPEG-2 Transport Stream (TS). The aim of the thesis is to develop an objective parametric model1 that can estimate the perceived quality at transport layer. The thesis work includes experimentation performed on High Definition (HD) video sequences with various bit rates and packet loss ratios (PLR).