IPTV India scenario

I had my doubts about the feasibility of IPTV technology in India. I was looking at what the service providers in India were doing about that. Interestingly, contrary to the western market, where the telcos and cable companies are competing against one another in delivering triple play services (voice, video, data), both Reliance and Airtel are deploying DTH and IPTV as simultaneous distribution channels for delivering video. This has to do with current broadband penetration in India. Thecurrent  strategy would be to target IPTV for broadband users and DTH for the video customers. Based on the announcements in the leading dailies,  Reliance, BSNL and Airtel were all targetting IPTV launch for quite some time, but there had many postponements. 

One issue had been about obtaining content from the broadcasters at the same price at which the DTH service providers get the content. Government has recently accepted TRAI's recommendations. Appropriate provisions would be added in the policy to enable the IPTV and DTH service providers have equal footing ground in procuring content.

 

IPTV market worldwide is expected to soar in the coming years and touch probably $12-$14 billion by 2011. Currently Europe is the biggest market, and Asia-Pacific region is expected to have the highest growth in coming years. However, it would be interesting to see how much India contributes to that compared to other Asian countries like Japan, Korea. Broadband penetration in India has been extremely low (<0.3%) compared to mobile subscription (currently the number stands at 300 million and can reach 600million in the next five years, i.e., 30-60% of the population).  Some of the optimistic projections predict 20-30million broadband users by 2012. If we look at the current offerings of BSNL IPTV, ARPU could be around only Rs 1000 ($20. I have my doubts about IPTV QoE with current price tag and currently deployed technology). With the tariff remaining unchanged, it would be interesting to see the TAM of IPTV in India and the profits that the leading service providers can make. All leading service providers have already made significant investments. BSNL and Airtel are using UTStarcom's RollingStream products for streaming and Reliance has forged a deal with Microsoft. 

Will IPTV make sense now for India

IPTV is the recent technology that is attracting everybody's attention. IPTV is part of triple-play services being provided by telcos and has given a change for telcos to survive. Though, IPTV is the biggest buzz now-a-days, the questions is whether IPTV make sense in India.

I guess not. At present in India we are struggling to get sufficient bandwidth speed. To get unlimited downloads with speed around 256-512kbps, it would cost above Rs 1000 ($25) per month. The connectivity is not reliable and peak speed can decrease further. In other words, the broadband connections are pretty unsatisfactory. Cable TV operators provide television channels of good quality at the cost of Rs200-Rs300 ($5-$7.5) per month and is significantly less than what we pay for a broadband connection.

Users are used to high quality television channels and to get that equivalent quality with similar channel switch speed, it would take arounf 30Mbps for IPTV connection with MPEG2 stnadard. With the evolving standard, MPEG4/H.264, the requirement can be significantly lower. However, it would be at least 2-5Mbps.

With the broadband penetration in India being very low and its growth story being not as strong as that of mobile phones, the bandwidth cost has not reduced significantly and will not reduce significantly in future. According to current BSNL tariff, to support consistent 2Mbps of data, it would cost around Rs9000. Therefore, it is quite clear that the telecom providers have to go a long way to provide IPTV service at a pricepoint similar to the cable TV service. For a primary cable-TV user, high cost of broadband connection would be a big deterrant. While for a primary broadband user, who uses perhaps 256-512Kbps, it does not make sense to pay such a high premium to get a very high-speed Internet connection for IPTV. So, in providing triple play to existing broadband users or moving the customers from cable operators, triple-play is not yet a strong story.

In USA, the story was different because cable TV and DSL connections were of equivalent price (~$50).

Reversing the trend: wired vs wireless

Wireless communications is less reliable than wired communications: this is what we have known for ages. However, this does not seem to be case at least in Bangalore, India. I was having a wired communication at home from Tata Indicom. I used to file 1-2 complaints per week for lack of Internet connectivity and some of the complaints used to be not taken care of for several days (even for 2 weeks). I was getting very frustrated and then decided to take the risk with WiMAX. Believe it or not, I have no loss of Internet connectivity for six consecutive weeks. That is amazing, given the performance I was getting.

Why wired was not working:

1. Copper is expensive and I guess, the metal market is soaring. So, copper wires were getting stolen and sold in the market. Wire cut was the most common phenomenon. There was even a suggestion, that fiber might be cheaper to maintain because the thieves have not yet figured out a way to steal fiber.
2. The trees snap the wires frequently. If the service provider does not have the permission to dig for deploying connections, the wires are all hanging from tree tops and you can have outages easily.
3. Adapters at intermediate points are getting stolen and junction boxes for multiple customers are placed in varied locations at the mercy of house owners.

Why WiMAX is working:

1. Subscriber antenna directly gets the signal from the base station and all the problems in maintaining the wires are gone. Less maintenance cost and i am not sure of the CAPEX numbers.

Challenge in the days to come:

1. Now we are at 256-384 kbps bandwidth range. When the requirement becomes high, it would be interesting to see whether wired connections are again required. Meanwhile, WiMAX seems to be good. I cannot watch a video streaming well, at least I am always connected when I do not have power at home.

In theory, wired is better than wireless, but in practice, the reverse is true in India.

Getting the big picture

Lots are happening in the technology space and this is because how people are currently using Internet to interact, socialize and share content. It is amazing to see how user behavior has opened up numerous opportunities to make business and do research. Last year (2007) I was at a conference, Communities and Technologies at MSU, to organize a workshop http://ebusiness.tc.msu.edu/cct2007/page4g.html on SMEs. The conference was an eye-opener for me. It was a first experience for me to be in a conference, where I do not just meet computer scientists but researchers and practitioners from various domains like social sciences, information science, management studies, ethnography etc, etc. There, I was amazed to find out about two main things: (1) how Internet is being used as a warehouse of information, or as a platform to interact and (2) how ICT (Information and Communication Technologies) is being used as a tool to connect the world, to uplift the lives of the under-privileged communities or to help the small businesses make money, i.e., to make a better living. Attending the various presentations, subsequently going over different articles, helped me to see the big picture: the common users are extremely powerful and they can do many things; they set directions in how technologies move; companies get new avenues to make money or researchers find new problems to solve. Technology (ICT) is a great enabler to help the users and in turn, users use and then find new ways to use the technology, which the technologists themselves might not have envisaged. This was my inspiration for me to look beyond research problems and take a holistic view of the technological world and see where new opportunities lie.