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Wednesday, June 30, 2010

Is IPTV Doomed to Fail?

IPTV (Interactive TV) has been a buzz word for the past 10 years or so. The total no of IPTV subscribers hover around the 20 Million mark at the end of 2008. France has 6 Million subscribers which is more than a quarter of the world’s IPTV subscriber base. U.S has 3million subs, while China accounts for 2 million. India probably has no more than 30,000 subscribers (estimate by author).

So why hasn’t IPTV taken off especially in India. The challenges faced by IPTV operators (Telcos) are many: Acquisition of content, Quality of Service , Network capacity and last mile access to the home. The IP backbone, video headend, set top boxes and access networks required for IPTV are greenfield deployments and an expensive proposition. Moreover, advertisers are not willing to advertise on a medium which reaches fewer subscribers. IPTV can reach the home via any broadband pipe, ADSL line, cable, fibre or even satellite broadband. IPTV is heavily dependant on broadband penetration and unless broadband permeates in our rural areas IPTV will not mature.

However, there is hope. In Indian rural areas satellite TV (DTH) was once the preferred choice but to compete cable operators have crisscrossed cable to small villages and offer 70 odd tailored TV channels for a small fee affordable by the rural masses. Now with the release of DOCSIS 3.0 specs cable operators worldwide are upgrading their cable networks to this standard to compete against fibre deployments by Telcos. The DOCSIS 3.0 specification will enable new features and benefits for the Cable industry. Data downstream speed of 150 Mbps has been demonstrated. It’s just a matter of time before the cable operators in India upgrade their plant to DOCSIS3.0, especially in the rural areas and make their cable plants ready for handling both upstream and downstream capability.

Probably BSNL has also recognised this threat from cable operators. BSNL is planning IPTV services in rural A.P. and subsidising the cost of the Set Top Box. The plan is to use the STB as a micro computer so subscribers in rural India can use their TV for email and internet browsing. The time is near when Cable operators, Telcos will compete for the entertainment segment based on interactivity benefitting the common man. The DTH operators will have to rethink their strategy.

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