The Case for IPTV in India (Part 2)

By Dharma Kuthanur, Guest Author

[Part 1]

Broadband prices are steadily declining and already very much within the reach of the middle-class. Today, basic broadband services start as low as $5-6 per month; these often include a cap on total download volume and unlimited use packages are priced at much higher levels ($20 & up). But with intense competition and increasing volumes, these price-points are bound to go down quickly. Cable TV packages are typically priced in the range of $5-8 per month.

So, to be competitive, IPTV service providers have to provide TV service packages that are in this ballpark. MTNL has already made the right move by pricing its entry level IPTV package for its initial rollout in Mumbai & Delhi at less than $5 per month, with the option to upsell additional value-added services such as video-on-demand, time-shifted TV, interactive services, etc.

Who has the potential to gain from the growth of IPTV in India? The IPTV ecosystem is fairly complex, with a number of different elements involved such as video equipment, set-top boxes, middleware, and service creation & management software, not to mention the basic infrastructure to provide broadband services. So a number of different players are eyeing the market, but all of them have to contend with the challenging economics imposed by the relatively low price-points.

Clearly, vendors from developing markets like China, India and even Israel would have an advantage. The large global infra vendors such as Cisco, Ericcson and Nokia can also play since this is a volume game, and they would have the option to localize manufacturing at a later stage. In fact, Cisco and other large vendors are already actively engaged with the large telcos, and trying to influence/stimulate their rollout plans.

Now, here’s the big question for India-focused entrepreneurs and VCs: are there any unique attributes in the Indian IPTV ecosystem that can be exploited by home-grown product and service start-ups?

This segment is part 2 in the series : The Case for IPTV in India
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