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High Expectations - Operators bullish on IPTV and mobile TV despite a slow start

April 15, 2009

Despite the advantages of internet protocol TV (IPTV) such as real-time interactivity, time shifted TV and video-ondemand (VoD), the service is yet to take off in a major way. It is the same with mobile TV. While terrestrial broadcasting has only been introduced in a limited way, mobile TV streaming is yet to become a popular value-added service.However, with the government finalising its policy on IPTV and MTNL launching 3G services, this scenario is expected to change. tele.net speaks to a cross-section of telecom operators who have launched IPTV and mobile TV services in the country, about the potential of these services in India...

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

Mahesh Prasad
Mobile TV has evolved significantly over the years and can be classified as either mobile broadcast services (using technology platforms such as digital video broadcasting-handheld [DVB-H] or MediaFLO), or as streaming mobile TV. For the former, the government has still not allocated spectrum and policies have not been framed yet.

Over the past seven years, IPTV has evolved into various network formats. One is a cable network (used in conjunction with telephone lines) where two-way communication is not possible. The latest format used in the country and abroad is based on Ethernet fibre, metro Ethernet networks as well as ADSL networks.

With respect to mobile TV in India, the challenge is to make it pervasive and cost effective. Enabling policies and spectrum allocation are needed. It is then that mobile broadcast services can be carried out in larger cities.

In the case of IPTV, the challenge is network rollout and broadband penetration. Given that IPTV is video centric, bandwidth availability is of paramount importance. With increasing broadband penetration –­ driven by efforts from Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL) and Reliance Communications (RCOM) –­ IPTV will take off in the coming years.

Namrata Sengupta
IPTV is generally confused with internet TV. The feeling surrounding IPTV is that the technology has something to do with the internet, but this is not so. IPTV requires bandwidth, but one doesn't need to connect to the internet. However, the perception is slowly changing and this change has to be brought about to make IPTV more acceptable in India. There are many interesting services that can be offered through IPTV. For instance, it allows messaging on the TV from one user to another with the remote acting as the keypad.

With mobile TV, people will have to be keen on using and watching TV on a small screen. They have to gain the understanding that it can be much easier.Bandwidth is available in this space but you have to see how many handsets are 3G enabled and what percentage of people have the purchasing power to buy these handsets.

Kuldip Singh
With respect to IPTV, the opportunity lies in the fact that it is a totally new concept. Its USP is that the service is interactive. Other TVs are mostly one-way.Hence, you can receive data but you can't transmit data to them. Since IPTV is two-way, there is opportunity for different types of content. The key challenge is that so far, IPTV has mostly been provided on a copper network and the problem with copper networks is that the service becomes dependent on the quality of the copper. How far we are able to maintain the quality of service from the exchange is the key challenge.

With regard to mobile TV, the biggest challenge is limited bandwidth; mobile TV can hence, not be delivered to many customers. Being bandwidth intensive, it will also be expensive. Thus, spectrum costs and profitability are serious challenges.

Senior BSNL official
The key opportunities in delivering mobile TV are the availability of content provided by broadcasters and content aggregators, which can attract the mobile industry's large customer base, and the availability of a large number of handsets that are enabled for mobile TV viewing.

However, there are some issues that need to be addressed. First, there is the issue of different frame rates. Second, different networks like HSDPA, UMTS, EDGE, GPRS, CDMA 2000-1X, EVDO and Wi-Fi impact bit rates. Mobile TV usage happens primarily on the move.However, mobile TV has to address the changing bit rates as the connection changes from 3.5G to 3G to 2.75G while on the move. Finally, clear video quality is required for most content, like security cams, sports events and temple feeds.

In the case of IPTV, 119 million TV homes in India and TV consumption of four-five hours per day indicates that TV is an essential part of the consumer's daily life. This represents a huge market for IPTV. In addition, the availability of content of high quality, mandatory CAS services in certain areas, and intense DTH competition will drive this growth. In fact, mandatory CAS will boost the uptake of DTH and IPTV, besides growing the digital cable homes.

However, more work is still required on channel costs as there needs to be parity between CAS area rates and DTH/IPTV rates. Channels should also be uniformly free or come for a charge across India.(Many channels are free-to-air [FTA] in CAS areas but are otherwise pay channels, while several others are FTA in southern India and pay channels in the north).

In addition, better content needs to be introduced. Interactive educational content may also be developed for the IPTV platform.

Finally, fibre should be deployed to the end-customer to enhance bandwidth. The use of this platform should also be explored for social causes.

What are the potential business and revenue models in these segments?

Mahesh Prasad

The mobile TV business model is largely subscription based. However, subscription charges have to be in line with mobile network charges and this will remain a challenge from a business point of view given the current status of mobile average revenue per user (ARPU) figures.

For IPTV, there are several business and pricing models. One is how to charge for the linear broadcast channels that are part of IPTV. This is what we are currently providing on Reliance BIG TV and it is essentially a combination of pay TV and FTA channels. In India, subscription packages for linear broadcast channels are delivered in the range of 100-125 days and go up to Rs 400-450.

There are also other value-added services with IPTV such as VoD, movies, music, games-on-demand and interactive services that are available on a pay-perview basis.

Namrata Sengupta
With Airtel and other players coming out with IPTV, people have started to understand IPTV as something that is convenient and can be watched at will. With IPTV, I think there is a target audience.With the government supporting the service, it should reach the masses. Mobile TV will still take some time.

We have an advertisement-based revenue model. People want everything at their convenience, on a single click on the TV screen. So, with IPTV, you can get anything you are searching for, such as information on a restaurant or a shop, at the click of a key on the TV screen.

Another model is icontrol mall, which offers shopping through the TV itself.Unlike telebrands, icontrol mall works like a TV channel where certain information about the product can be obtained and the user can then order it.

Kuldip Singh
Mobile TV and IPTV are targeted at heavy data users and business consumers who have to be in touch with their offices.There will be a large influx of people for the Commonwealth Games. They will be incoming roamers who will want to maintain high speed connectivity. The youth is another target segment because they are data savvy. In fact, 3G's success depends on the youth.

Senior BSNL official
For mobile TV, the franchise revenuesharing model is being offered by leading ISPs in India in partnership with outside agencies. These include BSNL, Airtel and Vodafone. This is also with respect to IPTV where the franchise revenue-sharing model is being offered by leading ISPs including BSNL, Airtel and MTNL.

Turnkey implementation of IPTV services is also under consideration by various service providers.

What are the key policy and regulatory issues in these segments? What steps can the government take to address these issues?

Mahesh Prasad
With mobile TV, the most critical thing is spectrum allocation and framing the rules for mobile TV broadcast. As far as IPTV is concerned, it is a practical situation with respect to how fast broadband networks can be rolled out. Once the broadband network is rolled out, it is a question of how cost efficient the technologies can be made, including set-top boxes and the delivery network for IPTV services.

Some of the regulatory bodies outside India have carried out local loop unbundling. In India, with fixed line penetration at about 40 million and declining, the IPTV challenge will still exist even if local loop unbundling is carried out, because you still have a vast majority of the subscriber base unserved by the wired network.

Namrta Sengupta
The Telecom Regulatory Authority of India's (TRAI) last directive was that cable and IPTV are to be considered as part of the same category. This is adding to our business. However, if you talk about regulatory issues, a lot of things have to be worked out from the government's end.

If we get a little more support from the government to make the service more reachable to the market in terms of expanding broadband penetration, then even rural people can watch IPTV content. Today, users have to pay a cable operator Rs 150-200, even if they don't want to watch half the channels that are available.In IPTV, if you want to watch five channels, you pay only for those five. It is interactive, personalised and the most effective way of watching TV.

Kuldip Singh
There aren't any policy and regulatory issues surrounding these services any more. Everything has been ironed out now that it has been formally established that IPTV can be provided by telecom service providers.

Senior BSNL official

  • The government should provide educational content free of cost to IPTV service providers.
  • Broadcast channels should come at cheaper rates than DTH as the IPTV platform is not only for entertainment but is also a good tool to spread education among customers.
  • There is a need to clarify, in the proposed IPTV guidelines, that access to internet content would be governed by the IT Act and not the programming code under the Cable TV Act.
  • It should be clarified in the proposed IPTV guidelines that the programming code provisions in the Cable TV Act apply to broadcast channels and not to VoD content.
  • Allocation of cable TV licences should be through a single-window platform to BSNL franchisees.

    Mobile TV

  • The telecom regulator and the broadcast regulator should provide policies and regulations (also including intellectual property rights laws) as a single mobile TV regulation.

    What is your current status with respect to these two services?

    Mahesh Prasad
    RCOM and many other operators around the world are providing streaming mobile TV services. We currently offer 19 channels using our CDMA network. We started with video clips and have moved on to mobile TV and then live TV with a twosecond delay back in 2005 with the launch of the news channel Times Now. The channel was first launched on our mobile and it then went onto cable and the pay TV market.

    We have been testing IPTV and various technologies and set-top boxes. A recent trial we were involved in was with Microsoft. We are planning to roll out IPTV services sometime this year.

    Namrta Sengupta
    We have tied up with MTNL and through the operator, we are offering icontrol services in Delhi and Mumbai. We have also tied up with BSNL and are offering services in 20 cities in northern India. We have 30,000 subscribers. The response has been very positive in Rajasthan and Punjab and the service is really picking up.

    Since IPTV is interactive, we get firsthand TRP ratings. We are very bullish on this service as we know that the service will take off in a big way.

    We are aiming at increasing visibility. We are organising a lot of activities in IPTV in malls. Once the public sees the service, they will pick it up.

    Kuldip Singh
    We currently have around 30,000 IPTV subscribers in two cities. The response is gaining momentum now that it has become clear as to what IPTV is and what it can provide.

    We have just started mobile TV services and since it isn't our focus area because it is very bandwidth intensive, we will be marketing 3G more from the perspective of data downloads.

    Senior BSNL official
    BSNL had floated an expression of interest for IPTV in September 2007 to sign franchise agreements with interested parties for 98 cities. It decided to award work in each city to two franchisees. Agreements have been signed for 87 cities with five franchisees.

    IPTV services are currently commercially available in 34 cities across the country. The number of IPTV customers as on March 31, 2009 is more than 10,000. BSNL has also decided to set up its own content delivery network in seven cities including Hyderabad, Kolkata, the National Capital Region and Ahmedabad. Procurement for the network is at the final stages.

    For mobile TV, BSNL has signed a franchise agreement with three outside agencies to offer the service to its GSM customers. The operator's mobile TV service is currently available on the 2.5G platform across the country and on 3G in select cities.


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