IPTV: Matching Expectations in India

 The provision of broadcasting content through Internet Protocol (IP) is all set to revolutionize the way we interact with our televisions. VARIndia looks at the possibilities of Internet protocol television (IPTV) in India.

Traditionally, TV broadcasting has been offered by terrestrial, satellite or cable platforms. However, the advent of Internet has provided a genuinely alternative medium for content delivery. IPTV, a digital television service, uses Internet Protocol over a network infrastructure, usually by a broadband connection. In other words, it is streaming, digital, high-definition television, available on a customized and on-demand basis. 

The recent release of InfoCom’s Quarterly Television Monitoring Service shows that IPTV has been making its way through the pay-TV market with a growing popularity in countries that generally have a large broadband subscriber base. Although some operators have achieved six to seven-figure IPTV subscriber count, others have not been as successful. 

The number of IPTV worldwide is on the increase. New research from Informa Telecom & Media puts global subscribership at 57 million by 2013. That is nearly triple of today's figure, but still represents only 4 per cent of TV households.

The report indicates the strongest growth for IPTV in the Asia-Pacific region with 22.2 million subscribers predicted by 2013. A Frost and Sullivan study estimates that there will be more than 27 million IPTV subscribers in the APAC region by 2013, with China and India being the high-growth markets. IPTV is the next wave of media that is expected to become popular in India as a complement to traditional television. “IPTV brings in the interactivity to television viewing and hence the potential of IPTV in India is enormous, though there has always been a slow adoption in the initial years as we have seen in mobile voice in India. But once the critical mass is achieved, the growth becomes phenomenal,” says Anuj Kapur, Director – Services Sales, Alcatel-Lucent, India. 

“Today, the infrastructure is still not in place for providing the necessary coverage and IPTV will be more in the niche geographical areas. But with the Government pushing for Broadband penetration, in order to bring benefits of information and content to the users, setting achievable targets for Broadband penetration of 20 million subscribers by 2010, IPTV will also see healthy growth.” “Several operators will be looking to grab this opportunity and are expected to adopt new technologies like WiMAX to achieve this growth.” 

“The IPTV adoption in India has been somewhat sluggish in the past, but we believe it will pick up this year onwards. Initially, any new technology takes time to reach its ‘point of inflection’, after which it starts growing at a much faster rate. Even broadband adoption in India was very slow initially, but since 2007-end, it has really picked up steam,” says Mr. Vijay Yadav, Managing Director, South Asia, UTStarcom. 

“In the case of IPTV, with the government now giving go-ahead to broadcasters to share their channels with IPTV providers, the deployment of Internet Protocol Television is all set to revolutionize and enhance television viewing experience in India. The slow but steady growth is already visible – we have observed more announcements on IPTV launches in the last few months than in the last few years.” 

The uptake of IPTV in the recent past had been slow, but the awareness is definitely increasing. The role of IPTV in Obama’s victory in the US Presidential elections, and an Indian politician embracing this technology for the upcoming Lok Sabha elections, have also helped create a lot of mass awareness in India.

“Due to lack of a policy on IPTV till recently, providers were facing problems in sourcing a variety of content to offer to their customers. But now, we see more and more tie-ups for all sorts of innovative content ranging from Hollywood flicks to even localized language programmes,” says Yadav. Aksh-MTNL is already offering IPTV services to consumers in Delhi and Mumbai. Similarly, it is now available in about 20 cities through Aksh-BSNL. Over a period of time, IPTV services have the potential to reach over 4 million MTNL broadband customers and over 6 million BSNL broadband customers alone. Then, there are several other private service providers who are planning to launch IPTV soon. 

Reduced time to market along with IPTV’s field-proven solution will also encourage more service providers to adapt to this solution, thereby increasing its footprint in India. With players coming forward to offer IPTV and each backing it with their marketing muscle, we expect there to be an explosion of awareness among consumers, and IPTV will soon become a buzzword among consumers. 

Initially, it may also help if the government incentivizes the rollout of IPTV in India, since it may significantly help in increasing broadband penetration and thereby help India achieve its target of 20 million broadband subscribers by 2010. IPTV technology allows TV broadcasters, content providers and advertisers to converge all their content together on a broadband platform to personalize contact and put interactive applications around it. “This is why IPTV has the potency to change the way we use television. It will free us from the so-called 'appointment television' where viewers are bound to TV schedules defined by the channels. 

IPTV, on the other hand, offers 'time-shifted' TV, where viewers can rewind and forward broadcast TV. Imagine watching one's favourite TV programme or sports event at a time of one's choosing, instead of being dependent on the channel's schedule,” says Anuj. IPTV provides limitless interactivity. For instance, IPTV allows customers to surf the Internet via TV sets, view caller IDs of incoming calls and with a click on the remote, even make a phone call and purchase a product while it is being advertised on the TV. 

With IPTV, users can also stream TV programmes to their mobile or to an office computer rather than being restricted to viewing them on TV sets alone. IPTV users can also schedule their TV programmes and set reminders from their PCs at work using the IPTV network. IPTV can offer localization and customization of content up to the user level. Another feature unique to IPTV is its ability to offer Quad Play – voice, video, data and mobility.

Being an open platform, IPTV will also allow creation of thousands of third-party applications that can be offered through the system – from placing orders for flowers to trading of shares while watching a business news broadcast channel and even advanced tele-medicine for which the remote centre would only need a telephone line and a television set or a computer screen. 

Even at home, IPTV would add a visual dimension to a plain old telephone call – imagine the photograph of the person calling you on your landline flashing on your television screen. Imagine, yet again, being able to answer the call not by picking up the handset but by clicking the TV remote button, even as one is watching a riveting programme. 

IPTV enables service providers to store live TV, or broadcast TV, content in their network for weeks, thus allowing viewers to watch programmes that they had missed out on. Service providers will also be able to store popular Hollywood and Bollywood titles, past cricket matches, popular TV shows, which the viewers will be able to access on demand. 

“Contrary to the current platforms that only allow watching TV programmes or accessing entertainment services over broadband, IPTV will be a delivery platform for value-added services and applications,” says Mr. Yadav. 

Challenges to IPTV 
A report by the International Data Corporation (IDC) estimates that in India, the number of IPTV subscribers is expected to reach 9,66,000 at a CAGR of 156.8% during the 2006-2011 period. Some market analysts are not so optimist due the concern with the broadband penetration in India. 

Although India’s backbone infrastructure is fairly robust, the last-mile connectivity (the end-consumers) is limited. TRAI figures show India's broadband subscriber base at 3.24 million at the end of January, with less than 1 million new users added between April 2007 and January 2008. IPTV is a technology hungry for bandwidth, demanding at least 2Mbps, but most of the so-called broadband connections have speeds of 256-512 Kbps, which are not suitable for a quality viewing experience of digital TV content. 

The country’s population is just over a billion, of which 30 per cent live in about 200 towns and cities. This would seem to size up the potential catchment for IPTV-via-DSL at around 400 million, including most of those in the towns, plus some in the villages sufficiently close to an exchange. On the other hand, only a small – though fast growing – proportion of these could afford IPTV services at present. The number of TV households gives another figure, and this stands at around 80 million, of which 35 million are on cable. But many of the cable subscribers receive pirated content, for which they pay a meagre amount or nothing at all. So, it is questionable how many would be willing, or could afford, to pay a viable IPTV subscription comparable with rates elsewhere in the world. There are signs though, that operators recognize how sensitive pricing is and are planning to come in with aggressively and flexibly priced packages. 

The major factors that have affected IPTV market in India included broadband penetration, costs and government regulations. Now that the government has put in place policies, it has helped cross a major hurdle. As I mentioned, providers were facing problems accessing a depth of content to offer to their consumers. Telecom companies being new players in the television segment became more aware of the challenges in sourcing great content that appeals to the palate of an audience with wide-ranging preferences. Recently, there seems to be some easing off on that front – we have seen some very strategic tie-ups and consumers finally will get to have the best of the content available on the best of technologies. 

Another challenge for IPTV had been to convince companies that the business model for IPTV was viable. While companies look at maximum ARPU, they cannot make IPTV services acceptable if they price it too high as compared to other options. Especially, MTNL and BSNL have proven that it is still feasible to offer IPTV cost-effectively to consumers. 

The availability of Broadband also has been one of the technological challenges.

Future
The market for IPTV has just started accelerating. We expect to see substantial growth in the number of subscribers over 2009, and can look forward to over million subscribers by 2010 for entertainment. As IPTV evolves to serve as a tool for information and productivity, including surveillance, the number would see a quantum jump. 

As of February this year, the decks have finally been cleared for telecom operators like Bharti Airtel and Reliance Communications to provide Internet protocol television (or, IPTV) services. This comes after the Ministry of Information & Broadcasting accepted the recommendation of Telecom Regulatory Authority of India (TRAI) to allow broadcasters to transmit their feeds via the IPTV platform. Under the present regulations, broadcasters are allowed to provide TV signals only via cable or DTH. IPTV allows the delivery of TV programmes using an IP and high-speed broadband network. Both cable operators and telecom companies will be able to provide IPTV services under the existing laws and their content will be regulated by the Information & Broadcasting Ministry. 

The telecom operators with unified access service licences and cellular mobile telephony service licences to provide triple-play services, as well as Internet service providers with a net worth of more than Rs.100 crore with permission from the licensor to provide IPTV can provide the service without further registration. The marketing research firm, iSuppli of California, has projected that the global IPTV subscriber base of 14.5 million in 2007 would grow to approximately 63 million by 2010.