New Delhi: India’s largest mobile phone operator, Bharti Airtel Ltd’s launch of Internet protocol television (IPTV) service on 19 January marked the entry of the first private player in the space so far served by state-run telcos Bharat Sanchar Nigam Ltd, or BSNL, andMahanagar Telephone Nigam Ltd, or MTNL.
Anil Dhirubhai Ambani-led Reliance Communications Ltd, or RCom, which has already had a trial run of IPTV service last year, is believed to be the next in line, followed by Tata Teleservices Ltd, and multi-system operators (MSOs) such as Rajan Raheja-owned Hathway and the Hinduja Group.
Also See Few Takers (Graphic)
While the advantages of IPTV over cable and satellite TV include real-time interactivity, and time-shift TV, where a viewer can rewind live-TV, and fast-forward recorded programmes, MTNL and BSNL have not found too many takers for their service as yet. The total number of IPTV households remains a negligible 22,000 of the 120 million TV households in the country. Of these, cable and satellite takes the lion’s share of 80 million households, followed by seven million direct-to-home (DTH) households, respectively, according to industry body IPTV India Forum.
“IPTV is a worldwide phenomenon but it has not taken off in India,” said Neha Gupta, senior research analyst at Gartner India, a research firm. Gupta says the market for IPTV in India is not mature yet. “The applications such as time-shift and live recording are still very expensive, and while the service will see a rise in demand if prices come down, it will still not be enough to get return on investments.”
The IPTV triple-play plan launched by Airtel, which includes at least 100 channels, broadband and a landline connection, for instance, will cost customers between Rs599 and Rs999 a month depending on the offer they avail. But along with this, they will have to pay Rs3,999 for activation of the service. In comparison, for Airtel’s own DTH service, launched in October, customers have to pay between Rs130 and Rs264, while the set-top box and its installation costs are Rs1,750. Cable and satellite TV services are even cheaper at only Rs200-350 a month, depending on the number of channels a customer opts for.
IPTV charges are not likely to come down significantly in the near future either. As IPTV gives viewers the option of fast-forwarding the ads, advertisers may pay less or not pay at all the channels that choose to ride the platform, say experts. The channels, thus, may seek a higher subscription charge from service providers, who, in turn, will have to seek higher fee from customers. “But this scenario will come up may be five years from now when IPTV actually begins to make an impact,” says Gupta.
Broadcasters and advertisers also feel IPTV will take time to establish itself and grow as a popular distribution platform. “IPTV is still a very niche market where the numbers are very low so it doesn’t concern us yet. IPTV might grow in the next five-seven years, when the broadband grows,” said Rohit Gupta, president, network sales, Multiscreen Media Pvt. Ltd, the broadcast network that runs channels such as Sony Entertainment Television and Set Max.
“Broadcasters will then probably have to customize offerings by giving different content to different platforms, but that’s not till the next four to five years at least,” he added.
An advertising executive, who did not want to be named, said advertisers will have to chart a different strategy for IPTV. “When IPTV picks up, advertisers will have to strategize marketing and advertising campaigns according to the platform they want to be present on. IPTV, then, may lose out on mass market brands,” he said.
Meanwhile, Mumbai-based television audience research firm TAM Media Research Pvt. Ltd has set up the system to track the viewership through IPTV, but it says it will wait for the penetration to come to a significant level before it starts measuring it. “TAM envisaged this situation a couple of years ago where multiple TV platforms would be available in India, so in line with our global parentage of Nielsen and Kantar Media Research, we adopted a new technology called TVM5 which is a digital peoplemetre and it can measure audience through DTH CAS and even IPTV,” said Siddhartha Mukherjee, vice-president, communications, TAM.
IPTV industry, however, is optimistic. “Like every new proposition, there are a few hiccups one has to face,” said Anil Jain, general manager, broadband, BSNL. “Trai (Telecom Regulatory Authority of India) had not set any pricing for IPTV earlier. So broadcasters were charging IPTV carriers five times the amount they were charging say a DTH carrier. But now broadcasters have reduced their prices significantly after Trai has issued its consultation directive.”
IPTV providers have to take a cable TV licence from the information and broadcast ministry before launching operations, Jain said. “These are the problems that once cleared will make IPTV an appealing service for the industry as well as the consumers.” The IPTV forum has, in fact, set a target of achieving one million subscribers by 2012.
Graphics by Ahmed Raza Khan / Mint