IPTV in India- Part-II

5 06 2009

Let’s continue our discussion on IPTV from earlier topic.

The main hindrance to IPTV services is need of Broadband connections (>256kbps) at home. At present India is having approx 7 million Broadband connections, Smart Digivision, to start with hopes to offer services to 1.6 to 1.7 million broadband subscribers of BSNL and MTNL. This sub base is mainly located at those 54 cities which are selected for countrywide launch. In short My Way will be targeting approx 80% sub of BSNL/MTNL situated at 54 cities increasing it to 2-3 million within three years. The company will be investing around Rs 500 Cr for its rollout services.

What will be success strategy of launch for IPTV?  According to global survey, the initial IPTV offerings basically provide a similar package as those offered by the cable TV companies, with a large number of TV channels, a reasonable amount of high definition (HD) TV content, Video on Demand (VoD) offerings, and some interactive content.  The competitive factor lies often in the price of the IPTV service offering as well as the price of the triple-play service bundles. So in short, for the first time, many cable TV customers have a real choice in full TV service, something they did not have in the past (other than the option to use satellite TV service).

Going by similar strategy, Smart digivision will be keeping cost similar to DTH providers. A subscriber has to pay Rs 2000 for installation, set top box & free channels viewing for three months. My Way offers 126 channels for Rs 280 per month or 95 channels for Rs 200 and prices of set-top box has been reduced from initial Rs 3500. So pricing model of IPTV services is kept resonably similar to that of DTH services.

But then if prices are similar, what’s the advantage of IPTV services over DTH? The advantage lies in IPTV’s two way interactivity. This means users can browse emails, chat with friends, locate places on maps and book rail tickets online along with usual programs viewing, which are not possible in traditional cable TV & satellite services. In those, users have simply no way to interact except changing channels.  

The true future of IPTV lies not in its basic television content, however, but more in its interactive feature capabilities.  Unlike cable TV service, which is a one-way delivery system to the user, IPTV is a two-directional system, allowing the user to interact with the services.  The method of delivering content to the user is also different.  Cable TV systems deliver all channels to all users over the pipeline going into the home or business, with the set-top box used to select what channel is being viewed.  This method requires a fairly large bandwidth being delivered to every user.  IPTV maintains content on the network with the system delivering only the channel selected by the user over the pipeline to that user, with the set top box still being used to select the channel to be viewed.  As bandwidth needs increase for new services and capabilities the IPTV providers may have an advantage over cable TV counterparts, but it may be short lived.  Cable TV operators can modify their network infrastructure to allow them to offer IPTV services, or new technologies supporting the Data Over Cable Service Interface Specifications (DOCSIS) could become ubiquitous, allowing for channel bonding, in which two or more network interfaces are combined to increase network throughput.

Does this interactive nature of IPTV services erode DTH shares? Not immediately!  Though Smart Digivision has tested Gmail services on television and in process of testing Yahoo mail, with the help of Mozilla Firefox which is being uploaded into set-top box, the interactivity has long way to go before it becomes reality. The clear advantage lies in the fact that both BSNL & MTNL are having huge sub base of wire lines and there will be no immediate competition for them in IPTV space.

Will this no competition in IPTV space create monopoly? What about QoS? Will it be comparable to DTH/Cable or better? Will it give rise to Broadband connection surge in India?  Let’s find out answers in next blog!

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