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).