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Slow but Sure - Telecom vendors look forward to growing IPTV and mobile TV uptake

April 15, 2009

Internet protocol TV (IPTV) and mobile TV are still in their infancy in India, but this is not stopping telecom vendors from eyeing their potential. A number of international telecom equipment vendors are working closely with service providers in the country to ensure the provision of these services to customers at reasonable prices. The following are the views of key telecom vendors...

What are the key opportunities and challenges in delivering IPTV and mobile TV in the Indian market?

Kapil Ahuja
The paradigm shift in infotainment is leading to a change in consumers' TV usage. From passive zapping to active browsing, the consumer is now looking forward to increased participation with the TV set serving as the centre of interactivity. From a purely private context to a means of communicating with others through social sharing, the TV will increase connectivity within communities. A good example is the "reality shows" and the number of voting responses that these shows bring in.

Service providers need to establish new revenue streams and acquire strong customer bases with differentiated services and alternative channels. Voice telephony and internet access have now become nondistinctive commodities. Telco TV is technically possible and will offer digital picture and sound of appreciable quality. This entertainment/communication bundle is seen as an area offering growth potential.

There is, however, a considerably large section of people in India that is not computer literate. The challenge is to create amongst them an awareness of IPTV's offerings. Also, a large demography of TV viewers in India are content to view broadcast TV without interaction, and without controlling what flows on the screen.They need to be made aware that IPTV transforms TV viewing. With IPTV, the viewer has complete freedom to choose what they watch, and when.

Live and time shifted TV, personal video recording and video-on-demand (VoD) give customers total flexibility in what and when they watch. Graphical and interactive programme guides allow personalisation of content, while online tools allow sharing experience with friends and family. The key driver will be giving the viewers a flavour of this experience.

With respect to mobile TV, the diversity in technologies makes it difficult for consumers to enjoy the TV content they want at a time and place of their convenience. For network operators, broadcasters, content owners and advertisers, the same technological complexity also makes it difficult to focus on customers and their needs. However, more consumers are looking for services that will enhance their way of living and allow them to create and connect with new communities. Through a single network operator, consumers can get TV services, user-generated content and other online services.

Lalit Chowdhary
The ability to provide broadcast services on networks originally designed for voice communications is a huge technological feat. This has become possible because of broadband technologies like ADSL and 3G, which can deliver high speed data onto the mobile instrument. The advantage that these networks provide is that the systems are interactive. This opens up additional opportunities for the operator to make the services more attractive for the consumer.

Globally, the IPTV business is worth around $6 billion. Of this, only 15 per cent has come from Asian countries. In terms of infrastructure to launch broadband services on traditional telephone networks,Asian countries are lagging behind. They need to make significant investment in order to upgrade these networks. However, Asian countries are doing extremely well on the mobile side.

IPTV depends significantly on broadband infrastructure. The availability of last mile infrastructure is especially important. There is DSL and trials are being carried out for Wi-Max and Wi-Fi networks. However, making services like IPTV available at a better quality requires significant investments in backbone infrastructure, which is more tuned for voice telephony. This is where investments are needed to make services like IPTV more accessible across the country.

Kanan Krishnan
IPTV is just another access method for TV services just like cable TV or directto-home (DTH) against which it is competing. IPTV definitely presents a business opportunity for service providers if they are able to roll out services for subscribers at similar average revenue per user (ARPU) figures as cable or DTH.

The challenge here is to maintain the same ARPU level. It is another challenge to consistently maintain the extremely high bandwidth levels required for paid TV programming.

Yet another challenge is last mile access. An operator can either provide services over a DSL network or over other nextgeneration networks like Gigabit Ethernet passive optical network (GEPON) or IP networks. Either way, private operators need to build on last mile network access. Only Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited (MTNL) have sufficient copper networks to reach out to homes today.

Another challenge is maintaining ARPU levels. DTH and cable provide the same content; so what should IPTV providers do differently? To try and attract consumers, they can come out with either value-added services (VAS) or a larger number of interactive services using the typical nature of IP itself. But to bring any of this about, of fundamental importance is having a critical mass of subscribers. Moreover, of the TV-watching population, only a small percentage may actually go in for VAS. Though there is an opportunity for VAS, operators will need to break the challenge of acquiring the critical mass of video-watching subscribers. This itself is linked to last mile access.Hence, the issues are all interlinked.

Procurement of content is another challenge as there is no content differentiation. In India, all content needs to be shared across all platforms.

However, this is not the case with mobile TV services. The nature of content streamed on mobile TV is going to be very different. Small clips are going to be aired, so there is an opportunity for content providers to make specific content of very small clips that can be watched on a small screen.

In terms of challenges for mobile TV, bandwidth is a significant one. Existing mobile networks are very congested and there isn't much bandwidth left. Operators will, therefore, have to use Wi-Max. There are also licensing and spectrum issues. Smoothening out regulatory issues will be very important for mobile TV to take off. Operators are also struggling with finding appropriate business models.

Himanshu Sahu
There are several opportunities and challenges for mobile TV and IPTV. The key opportunities will be presented by the following areas:

  • Uniform experience of the end-user, whether on TV or mobile or PC. This will become a win-win economic activity for vendors, operators, content creators/distributors and end-users.
  • Faster evolution high speed networks like 3G, long term evolution and everincreasing bandwidth requirements for end-users.
  • Many opportunities to monetise content as level of broadband penetration in India improves.
  • Opportunities for Indian content creators to address the need for Indian content in the international market.
  • TV as an infotainment device.
  • Broadband penetration is about to hit the tipping point and video communication will be the next killer application.The main challenges include:
  • Content aggregation is still expensive and becomes a major cost for IPTV operators who are yet to have the required scale of operations.
  • The buying power of operators in the mobile TV ecosystem is very high, resulting in limited incentives for content creators for this environment.
  • Pilferage of content in non-CAS cable networks may deter paying customers to migrate to IPTV.
  • Regulations on viewing internet content on TV will limit the free flow of information in society.

    What are the key enabling technologies for mobile TV and IPTV?

    Kapil Ahuja
    One can plan a clear evolutionary path from 3G video streaming and download to full broadcast capabilities. As the market evolves, multimedia broadcast multicast services will come to provide multimedia services such as podcasts and VoD to large audiences over 3G networks. Complying with open standards for mobile TV is essential for interoperability. We must not only adopt the use of open standards such as DVB-H, OMA BCAST and 3GPP, but must also be proactive in creating and evolving them.

    Lalit Chowdhary
    The key enabling technologies for IPTV and mobile TV services are compression technologies like MPEG2 and MPEG4 and digital rights management. There is a significant apprehension in the minds of content developers for the content to be secure over the public network and interoperable on different devices. Standard based Compression and DRM are two key enablers from infrastructure side.

    In the case of IPTV and mobile TV specifically, high speed DSL is the key enabler. Multicasting protocol is another key enabler using which one channel can be sent over multiple links.

    The key challenge in IPTV is that the user gets only one channel. When the user wants to switch between channels, this has to be really fast to get the same experience as that on cable TV. Fast switching between multicast channels can thus be a key enabler on the IPTV platform.

    The same holds true for mobile TV except that there is a difference between mobile TV and IPTV. In IPTV, a remotedevice can be used to switch from one channel to another. There is a programme guide to navigate through channels. This can, however, not be done on a handset. All that a handset user has are number pad keys that have been designed for making phone calls. Making users comfortable with switching between channels and getting electronic programme guides on their phones is still an evolving technology.

    Kanan Krishnan
    For mobile TV, the rest of the world seems to be adopting the digital video broadcasting-handheld (DVB-H) mode. In terms of the actual broadcast network, mobile TV will probably be riding on a 3G network. For IPTV, the IP mode of transport from the central office to the subscriber, either by DSL, ADSL2+ or any other form, is an important component.

    IPTV is generally TV content via broadband. So, DSL or other wireline networks like GEPON are very important for delivering the service.

    Himanshu Sahu
    The key enabling technologies for mobile TV and IPTV are 3G and broadband.This is in addition to passive optical and other networks. Adoption of IP networks is also a key enabler for IPTV services.

    What are the international trends in these two segments?

    Kapil Ahuja
    IPTV is a fast growing market. Today, there are more than 300 million households with broadband, and the number is growing rapidly. Service providers are facing growing demand for personalised and paid-for content via IPTV.

    Lalit Chowdhary
    There is significant standardisation of middleware and other access technologies to enable things like fast switching between channels. There is also massive digitisation of content libraries. This is because of significant uptake of VoD and time shifted TV so once these digital libraries are available, people can pick and choose their content.

    That's one visible trend. Having these content libraries makes it possible to syndicate them, making them available to global audiences. On the user experience side, interactivity is becoming more popular. Internet-based TV is finding significant acceptance. On the quality side, high definition TV (HDTV) is another emerging trend and we see VoD, etc., migrating towards HDTV.

    Kanan Krishnan
    There is a high degree of deployment of IPTV in the US and probably Japan is also headed that way. In the US, AT&T provides IPTV using the DSL mode. There is a possibility that the US may go towards the MediaFLO technology.

    Himanshu Sahu
    Both segments are growing and operators are investing to improve ARPU levels.

    Given the current state of the economy, what is the industry outlook for these services?

    Kapil Ahuja

    Mobile TV offers media service providers with a significant opportunity to strengthen their brand through innovation, and to introduce an important revenue stream.

    Latest market forecasts for mobile TV show rapid usage and revenue growth.

    Analysts predict that nearly half a billion people will regularly watch TV on their phones by 2011, generating more than 11 billion euro in operator revenues.

    Lalit Chowdhary
    Though the economy is in a slowdown mode, there is no slowdown in India on the basic mobile access side. Mobile TV would have the potential to generate significant revenues if it was available on a "pay-perview" basis and its pricing was correct. Most news and events occur when people are not sitting in front of their TVs. There are likely to be 9 million IPTV subscribers in the next two years. India is likely to achieve about 2 per cent penetration, which is fairly plausible. It depends on the way content is structured for people to pick it up on their mobiles.

    On the mobile TV side, 150 million users are expected to adopt mobile TV in the next two years, which is again a conservative estimate.

    Kanan Krishnan
    Consumers will look for any entertainment that they can get. MTNL has rolled out 3G networks and expects to sell about 1 million 3G handsets.

    But the future outlook depends on the service provider and how much capex a service provider has and will be able to invest in networks. Will they be able to wait for the typical gestation periods of returns on investment? This is where the challenge is for a service provider to get into capexintensive IPTV services while subsidising set-top boxes. For mobile TV providers, the challenge is to find content and build networks. Will they be able to come out with a business model that is feasible? From a service provider's point of view, these are challenging times.

    Himanshu Sahu
    The belief is that this will be adopted by end-users. There are financial gains to be realised from video calling and other broadband services.This will help endusers optimise their spends on communication/ travel/ entertainment/ business etc.

    Given the slow economy, it will also provide more time to end-users to watch content, further helping the industry.


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