The Case for IPTV in India (Part 1)

by Dharma Kuthanur, Guest Author

If you look at different elements of the quadruple play (wireline, wireless, broadband and cable TV), the Indian urban consumer has abundant choices for wireline, wireless and broadband services. In fact, in most areas, there is vibrant competition with 3-4 different service providers vying for the consumer – more choice than what we have here in Silicon Valley!

But it’s an entirely different story for Cable TV – there is little or no competition, and to make matters worse, the highly disorganized sector puts the consumer at the mercy of the local “cable-wallah”. Even government behemoths like BSNL and MTNL appear like paragons of professionalism and organization compared to the local Cable TV franchisees. So, IPTV service providers have their work cut out for them – by providing choice and better customer service, they have an opportunity to grab market share from the Cable TV providers.

Now, let’s take a look at some macro-level data. The number of wireless subscribers is around 140 million, wireline subscribers is around 48 million, Cable TV penetration is at around 60 million households, and Broadband penetration is at just 1.5 million households. If you compare the last number with the first three, its pretty clear that for today’s broadband service providers in India (BSNL, MTNL, Reliance, etc), IPTV has the potential to deliver the following: (1) Additional revenue streams from existing infrastructure assets; (2) Potential to use IPTV as the driver to significantly enhance Broadband penetration and take it beyond the niche PC-owning urban household segment that has adopted it so far.

The large telcos have already widely deployed Broadband infrastructure all over the country, reaching more than 300 towns & cities. Even if they decide not to target the rural market, IPTV presents them with a great opportunity to generate incremental revenue streams and take market share away from Cable TV providers in the Tier 1 & Tier 2 cities.

For Broadcasters and other content providers, IPTV provides a much-needed alternate distribution channel, and they no longer have to fear being held to ransom by the dominant Cable providers (who in the past have used methods like “black-out” threats before major cricket games to force broadcasters to agree to their terms). Besides, they may also gain from more stream-lined billing & collection, which is a serious problem they face with the current Cable TV franchisee model. So the incentives are clear for all the major players in the value chain.

(to be continued)

This segment is part 1 in the series : The Case for IPTV in India
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