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Can the hype surrounding Internet protocol TV (IPTV) in India live up to its expectations? Are the Indian consumers ready for IPTV? That is a million dollar question. While telecom companies enjoy an obvious advantage in rolling out IPTV, penetrating the local market will not be a cakewalk for them. The road ahead is laced with tough challenges, which call for stability and sustainable players.
The first block, as far as launching the service in the market is concerned, was the state owned telecom service provider MTNL. As part of this initiative, MTNL entered in a strategic partnership with IOL Broadband for providing content delivery network. At the moment MTNL's IPTV service beams in 25 channels, which include the channels from the Star TV network and some free to air channels as well. MTNL charges a subscription fee of Rs 199 per month and in addition to that, Rs 100 for set top boxes.
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IPTV: Delivering entertainment content over broadband
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Explaining the road ahead for the company Piyush Agarwala, Director-Broadband, MTNL said, “We plan to roll out 100 channels in next six months with an increased focus on content.”
He also added that while the initial response from the consumer was a bit low, they are hopeful that it will pick up once more channels are added to the service. However, he also mentioned that once MTNL adds in more channels to its bouquet the subscription rates are also likely to go up.
Thus, as competition increases, pricing will be the most contentious issue which service providers will have to deal with, while keeping in mind the already well established network of cable operators eating into their subscriber base.
Talking about the future of IPTV in India Agarwala clarified, “Before starting we carried out a survey on the acceptance levels of IPTV with the Indian consumers and around 82 percent of the people surveyed wanted to migrate from cable to IPTV.”
Another major challenge for the telecom companies would be that of providing content for IPTV, as service operators will be entirely dependant on content generating companies. “We are working on a reasonable pricing model where we can offer maximum content to the subscriber along with quality,” added Agarwala.
MTNL's biggest strength in IPTV is its ability to provide bandwidth on copper cabling networks and its vast base of fixed line subscribers which no other service providers possess. Agarwala is however skeptical about the video on mobile service. “Television on mobile is a subjective issue and how far it will be successful is still a big question,” he said.
IPTV enjoys the benefits of traditional cable television but with the added ability to let users watch what they want at their convenience. While it is similar to what traditional cable companies offer, the selection isn't limited to movies or special titles. Everything on the screen, including television shows, is on-demand. IPTV offers a world where the concept of a TV channel no longer exists; meaning branding channels will no longer have meaning.
In East Asia, the government's cyber initiatives, as well as TV-over-DSL, gaming, adult content, music and gambling were the key drivers of broadband. It is still to be seen if this mix works for India.
The market for TV and video in India is not exactly empty. There is a huge cable and satellite TV infrastructure (with nearly 50 million subscribers) to contend with. The private telecom companies are working out business models, with their content providers and equipment/software partners, to penetrate the market. The incumbents have chosen the franchising route, looking at the franchisee as a 'strategic partner' to market the concept and organize supply. Service providers have to work overtime to dish out a completely different content to the subscribers in order to take the viewers away from traditional TV viewing.
Software like MS Windows Media Server, and IPTV equipment brought out by Cisco, UT Starcom etc are part of the building blocks that will help in bringing the concept to reality. “Delivering entertainment content over broadband networks (IPTV) will truly empower the user to gain control of their content according to the times pre-set by them” said Vijay Yadav, MD-South Asia Operations, UT Starcom, a company that provides interactive broadband solutions to the telecommunica-tions industry.
According to a study done by ABI Research, total subscribers for IPTV may exceed 120 million by 2010 with Asia Pacific constituting roughly 47 percent of the total subscribers worldwide. With China and India emerging as major markets.
The hype about IPTV is not understated and can be gauged from the fact that all the major telecom players have joined the bandwagon. “With average revenue per user (ARPU) for fixed line telephony service falling every year, telcos want to provide additional value-added services to their customers. Operators and content providers are coming together to deliver value-added services, but the industry is still evolving standards in India,” said Yadav.
Reliance Communications Ventures (RCoVL) plans to roll out IPTV services in India by the end of 2006, and it has already roped in Microsoft funding. RcoVL has in place 80,000 km of fiber optic network for IPTV services, and according to sources the company intends to spend Rs 1,500 crore annually to expand this network further.
Through their IPTV network RcoVL plans to reach five million customers in 200 cities across India. In addition to negotiating distribution partnerships, the telcos have been buying TV and video production facilities over the last few months. Reliance taking a 51 percent stake in Adlabs, a film production and distribution company, is one step in that direction.
The success of IPTV in India will critically depend on certain things like the unique value proposition it offers in comparison to the existing cable TV fare; on successful implementation of last mile strategies; and on successfully ironing out bugs in the new technology, as well as providing efficient support services like billing.
Courtesy: V&D Connect
Source: DQ Channels
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