Smart Idiot Box

World over what drives the demand for the triple play-is
the phenomenal growth of broadband access. Using broadband merely for High Speed
Internet Access (HSIA) is not going to be enough as has been vindicated by
falling ARPU and the sluggish growth of subscribers in bigger broadband markets,
globally. Such trends have compelled operators to explore new ways by
introduction of value added service in the form of triple play (telephony, data,
video) to ensure consistent revenue and subscriber growth. 

Albeit, in Internet Protocol terms, fundamentally all
services are treated as data, yet we can classify the triple play to provide
essentially three cutting edge applications namely telephony in the form VoIP
and video telephony, data in the form high speed internet access, and video in
the form IPTV. Since, the services under the gambit of various e-governance
initiatives of the government  bear
the character of these applications, these are contemplated to be great enablers
for proliferation of broadband.

IPTV is the transmission of Television (TV) over broadband
network using High Speed Internet Protocol technology. It requires a minimum
downstream bandwidth of 20Mb/s per subscriber, concurrently. IPTV has been
touted as the golden goose for fixed line operators providing them a treasure of
new services such as superior quality TV broadcast, video on demand, time
shifted TV, personal video recorder, and host of other similar services, which
have the potential to reverse the decline in broadband ARPU and growth of
subscribers. For a flourishing IPTV market in our Indian context, it is of
paramount importance to understand the critical facets that would impact
emergence and growth of IPTV.  There
is a very discerning need to know IPTV and spread its awareness among the
potential consumers and other stake holders.

Challenges

IPTV is the most talked about topic today in the communications industry, as
it promises to unleash a revolution in broadband arena by providing exciting
opportunities for revenue generation.  As
a result, almost every operator aspires to make IPTV a part of his enriched
product portfolio. With IPTV, the newfound opportunity, come myriad
challenges-economical, technological, and operational.

Economical:

• Building a strong business model

• Acquiring new marketing, branding, and sales capabilities

• Pricing of IPTV services

Technological:

• Selecting suitable technology and building integrated
  network

• Content development, acquisition, and management

• Integration of middleware, CRM, NMS, OSS, and billing systems

Operational:

• Managing regulatory aspects

• Defining and selecting appropriate customer proposition

• Managing high standards of quality, reliability, and SLAs

IPTV require significant investment in building an
integrated reliable IPTV network that consists of IPTV devices (IP set top
boxes, video servers, head end etc), content, integration with broadcasters,
middle ware, and operation support systems. To enable IPTV service, there will
be convergence of technologies, convergence of network, and convergence of
content. Since IPTV is a new business, with which telcos are not quite familiar;
this calls for acquiring right competence for spreading awareness, marketing,
branding, and sales of resulting new value added service. Pricing the IPTV
services will be key to profitable business model.

Fundamental to the success of IPTV are development,
acquisition, access, and management of content. Bringing together content and
telecom could be critical as telcos lack expertise in content development,
acquisition, and management. Content should be accessible in a reliable, fast,
and easy to use manner with a simple remote like device.Â
Security of content will be of paramount importance. It must have
protection of patent and Intellectual Property rights.

Cable TV operators and satellite TV broadcasters would face
a novel competition emerging in the form of IPTV service from telcos. IPTV will
sure impact these businesses adversely.  Regulatory
fight could become intense in India and might hijack the flight of IPTV at the
nascent stage itself. It is proven that wherever regulator has stepped-in,
penetration and growth has been faster exceeding the expectations, as has been
witnessed in the mobile services arena. Therefore, an empowered regulator will
be the need of the hour. 

In the US, when the cable TV and TV broadcasters discovered
that telcos such as AT&T, SBC, Varizon, Bell south etc have aggressive plan
to foray in to IPTV business, they approached Federal Communications Commission,
lobbying it to stipulate stringent requirement for those telcos. This ordeal has
delayed the deployment of IPTV in the US inordinately.Â
In China too, the government is seriously mulling to protect cable TV
operators to ensure that IPTV does not hurt them badly.Â
In European countries such as Italy, France, UK, Belgium, the regulatory
bodies have started evaluation of IPTV.

Major Hurdles

• Last mile network access infrastructure remains critical
  foundation for delivery and performance of the broadband service. Inadequate
  growth of last mile broadband infrastructure can prove to be a major hurdle.
  Most recently, globally, there are about 100 mn broadband subscribers, whereas
  there are only 1.5 mn IPTV subscribers, which translates to a density of 1.5% of
  net broadband subscribers. In India, presently the number of broadband
  subscribers itself is less than one million. Therefore, going by the foregone
  formula, what would be the state of IPTV can be imagined?

• Potential resistance from cable TV operators and satellite TV broadcasters
  could hinder IPTV as they meet killer competition. Many broadcasters own cable
  networks also and they would not like to share the content with telcos due to
  fear of competition and loss of business. So, this could lead to problems of
  suitable content acquisition.

• Availability of cost-effective and affordable devices and terminals with
  adequate features to support full-fledged IPTV services could become a concern
  area.

• Lack of standardization of technologies involved, could be a dampener.
  Proprietary systems will cause interoperability and integration problems.

• Stand-alone ISPs still find the leased bandwidth to be expensive that does
  not justify their business models for broadband and IPTV. This could discourage
  them to start IPTV as they will find difficult to compete with bigger telecos
  who have built substantial infrastructure.

All these aforesaid challenges and hurdles would
necessitate meticulous assessment and management by companies as they proceed to
implement commercial deployments of IPTV.

IPTV's USP

It is worthwhile to describe steps, which are most likely to proliferate
growth of broadband and that can make broadband IPTV attractive for consumer and
profitable for the operator.

• Low price entry model need to be adopted so that more
  subscribers can come on board.

• Much talked about unbundling of last mile local loop and infrastructure
  sharing will be a shot in the arm for accelerated growth of broadband and hence
  IPTV.

• Broadband service should be granted status of essential services, since it
  has a galvanizing effect on holistic development of India economy, so that IPTV
  proposition could be made affordable to large masses.Â
  Certain measures that should be taken in this direction include
  elimination of duties and taxes applicable on the equipment required to build
  broadband network and removal of service tax and revenue share levied on
  broadband service.

• Development of a partnership revenue share model with partners such as
  content providers and broadcasters will help to make the service provision
  affordable.

• A multi-pronged revenue model by way of content, service, and access will
  provide consistency in revenue generation.

• Availability of adequate spectrum for new wireless technologies such as WiMax
  need to be ensured as wireless means are set to emerge as one of the most
  suitable media for providing broadband access connectivity.

Global Scenario

Globally, very few companies have launched IPTV on a ground scale, so far.
Even deployments by early movers such as at PCCW in Hong Kong, Fast Web in
Italy, and Free in France are relatively small. PCCW has about 500,000
subscribers. It launched traditional channel based TV with innovative bundlingÂ
and packaging of programs. Fast Web in Italy has about 160,000 subs. It
started IPTV with VOD and interactive TV. Belgacom in Belgium has over 200,000
subscribers. Home Choice in UK launched VOD and channel based viewing with
better quality video. In the US AT&T, Verizone, Bell South, and SBC are
planning large-scale IPTV networks to compete against the cable and satellite
TV.

In Asia Pacific, IPTV is picking up fast. According to a
research report, Asia Pacific is slated to have more subscribers than any other
region in the world, garnering over 50% market share. It is forecasted that
there will be more than 20 mn IPTV subscribers by 2010 growing at the rate of
over 100%. Growth here will of course be led by China.

In India, nothing much has happened about IPTV except
trials and plans. India is set to become a big market attributed to its large TV
density and the fact that people like to spend more on entertainment will be
favourable.

Ramdev Sharma,

CTO, Huawei Technologies India 

vadmail@cybermedia.co.in