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Slow Start - IPTV remains a niche, though growing, segment in India

April 15, 2010

The internet protocol television (IPTV) market has been witnessing high growth globally, with close to 30 million subscribers. However, the service has had a slow start in India.

Launched with great expectations in 2006, IPTV has so far gained a subscriber base of only over 13,000 in the country, compared to 10.9 million users of digital pay TV, mainly direct-to-home (DTH) TV, according to Frost & Sullivan's estimates. However, the International Data Corporation (IDC) estimates that with Indian telecom operators looking at newer avenues to drive up revenues, the uptake of IPTV is expected to reach 966,000 by 2011 at a compound annual growth rate of 156.8 per cent. Moreover, 15.9 per cent of all the residential broadband subscribers are expected to use IPTV by end-2011.


India's first IPTV deployment took place in 2006, when Mahanagar Telephone Nigam Limited (MTNL) rolled out IPTV services in Mumbai over its digital subscriber line (DSL), asymmetric DSL and ADSL2+ network infrastructure. Bharat Sanchar Nigam Limited (BSNL) soon followed suit. In February 2008, private players were given the go-ahead to launch IPTV services by the Telecom Regulatory Authority of India (TRAI). So far, Bharti Airtel and Reliance Communications (RCOM) have successfully launched services in select circles. However, while state-owned companies are aggressively promoting IPTV, the private players have kept a low profile.

Operator initiatives

BSNL, the country's largest IPTV player, launched its nationwide IPTV network in January 2009, adopting a franchisee model by tying up with the Smart TV Group and Aksh Optifibre. The company's IPTV portfolio comprises over 140 TV channels in addition to value-added services such as movies-on-demand.

BSNL is reportedly targeting over 3 million IPTV subscribers in 93 cities over the next two years. The operator set up fibre-to-the-home (FTTH) services in Hyderabad in February 2010. Apart from internet access and IPTV, the service will facilitate interactive gaming, local area network, voice over internet protocol services and video conferencing at download speeds of up to 2.5 Gbps and upload speeds of 1.25 Gbps.

MTNL introduced its IPTV services in Delhi three years after soft-launching the service in October 2006. At present, it offers telephony services, broadband and IPTV using a single connection. Its IPTV network includes 150 channels besides services such as movies-on-demand and interactive search.

Bharti Airtel
The early-2009 launch of Bharti Airtel's IPTV service, Airtel Digital Television Interactive, marked the entry of the first private player in the IPTV space. The IPTV triple-play plan was launched by the operator for users in the National Capital Region in two main package options. While the first offered 135 channels at a monthly rental of Rs 999, the second offered 117 channels for Rs 599, in addition to broadband and landline connections. At present, the company offers plans ranging from Rs 399 per month to Rs 1,899 per month. The speed and data transfer in these plans are in accordance with DSL connections of the users. The operator is still in the process of evaluating cities such as Chennai, Mumbai, Hyderabad and Bangalore before launching the service aggressively.

Reliance Communications
In November 2007, RCOM entered into a strategic partnership with Microsoft to deliver its IPTV service, powered by the Microsoft Mediaroom IPTV software platform. RCOM, which launched its IPTV service in Mumbai in early 2008, has not undertaken any aggressive expansion plans to promote its IPTV uptake across the country yet.

Aksh Optifibre
Aksh Optifibre, a pioneer in IPTV in India, utilises the copper-line infrastructure of MTNL and BSNL for rolling out its TV services. The company, which has a presence in Delhi and Mumbai through MTNL and in about 20 other cities through BSNL, is targeting to attain close to 100,000 subscribers by September 2010 and has undertaken aggressive expansion plans for the same. It intends to expand its presence in 20 other cities by end-2010, and is accordingly planning investments worth Rs 1.5 billion. The company will also be setting up an FTTH broadband network, offering triple-play services vis-à-vis voice, IPTV and data in the rural, semi-urban and urban areas. It has already initiated the pilot project in Jaipur, where it intends to increase its subscriber base to 25,000 by December 2010 from the current 3,300 subscribers.The model will then be replicated in other parts of the country to surpass 100,000 subscribers from the existing 30,000. Aksh's IPTV partner BSNL has also invested Rs 2 billion for setting up an optical access network in Jaipur.

Through its icontrol IPTV, a television connection based on the advanced MPEG 4-10 technology, Aksh offers over 125 channels as well as video-on-demand (VoD), video classifieds and shopping.Moreover, the users have the option of a la carte pricing, whereby they need to pay only for the channels they watch. The company is now planning to appoint channel partners in each city to improve its services and reach.

Until recently, the firm had been facing legal problems that had delayed the full rollout of its services. Broadcasting companies were refusing to allow the time-shift feature on their channels since it involved caching and retransmission of their content. However, in April 2009, Aksh, in association with BSNL, successfully launched this feature on pay channels, thus enabling viewers to rewind, pause or forward already televised programmes.

International players such as Cisco, UTStarcom and CopperGate have been showing a keen interest in the Indian IPTV market, and plan to bring in innovative technology, breakthrough business models and world-class content.UTStarcom has opened its IPTV technology centre and a centre of excellence in India to develop and enhance standards for IPTV deployments, and to support the global development of IPTV services.CopperGate is also looking to tap the huge Indian market in the near future.MyWay TV has recently forayed into this business and is gradually gaining presence.

Issues and challenges

In spite of having benefits such as interactivity, VoD and ease of installation, IPTV deployment in the country has not reached even a fraction of the projected numbers. The choice of middleware platforms and video server architectures, changes in bandwidth requirements, and availability and interoperability among enabling technology products are the key challenges to effectively delivering high quality video services.

The deployment of IPTV services in India has not been all that successful on account of the slow penetration of broadband internet. The current broadband subscriber base stands at a mere 6.28 million. India's broadband penetration, at 2 per cent, is among the lowest in the world.Although it is expected to increase its reach in the future, only advanced technologies such as very high rate DSL, WiMax or long term evolution can aid broadband growth.

Another bottleneck is the lack of high speed wiring and copper cables. In India, last mile connectivity is still provided through copper cables, mostly on account of cost considerations, thereby limiting the bandwidth accessible to the end-user.It has been estimated that a viable, multichannel IPTV broadcast will require bandwidths of about 20 Mbps.

Quality issues also continue to be an area of concern for IPTV. It requires at least a 1.5 Mbps line (with MPEG-4) for basic services at a good quality level and an 8 Mbps line (with MPEG-4) for high definition TV services.

On the regulatory front, the concerns pertain to the need for a legal framework to support content storage, redistribution and super-distribution; protection of privacy of user content; and provision of a framework for detection and prosecution.Some of the other issues are a lack of customer understanding of the product proposition, content readiness and costs, unified standards, pricing and promotions.

The growing popularity of wireless connections has also impeded the growth of IPTV, which requires a fixed line broadband connection to work on. IPTV service providers need to offer high quality innovative content to make this technology a success in India.

However, content aggregators Aksh Optifibre and IOL Netcom are optimistic about the sector's growth potential. They not only intend to target broadband users in metros, but also plan to launch services in smaller cities in a phased manner.

Going forward

Once FTTH and Wi-Max become cost effective, they will not only help in bringing about the exclusivity of content and differentiation –­ which are essential for IPTV's success –­ but also help in resolving bandwidth and infrastructure issues associated with broadband through DSL.However, IPTV service providers will also need to increase their bouquet of services from the current VoD in order to differentiate themselves in the market.

All in all, while there are plenty of challenges that need to be resolved, the sector is poised to grow. The real challenge now is to tap the true potential that IPTV has to offer in order to make it a viable business for operators.

IPTV current status

Subscriber base: Over 13,000 (as of December 2009)
Broadband subscription in India: 8.59 million (as of February 2010)
Service providers offering IPTV: BSNL and MTNL (under the MyWay TV brand, a SmartTV Group initiative), Bharti Airtel, RCOM, etc.
Technologies deployed:
ADSL2+, VDSL, metro Ethernet, MPEG4 format
Business models adopted: Franchisee model. BSNL and MTNL have tied up with the SmartTV Group and Aksh Optifibre
Services/Content offered: Multicast, VoD, time shift TV
Road map for the future: Introduction of FTTH, broadband growth at 5 million per year, high definition TV, blended services through proposed next-generation networks and service delivery platforms


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