The Hindu Business Line : ‘Net TV will struggle to gain foothold here’

The hybrid model offers an inexpensive route to triple play, while providing extra revenue through cross-selling pay-TV to broadband and voice customers.

Our Bureau

New Delhi, Nov. 14 Gartner Inc, the leading global IT research and advisory firm, said Internet Protocol Television (IPTV) will face a raft of problems that will hold it back for at least five years, foremost being the low base of broadband connections to households in India.

At least four telecom companies including Bharti Airtel, Reliance Communications and BSNL have announced plans to launch IPTV services over the next few months.

Digital vs analog

“Despite being a more advanced technology capable of additional functionality, IPTV is not well placed in India when compared against other digital broadcast distribution channels such as direct-to-home (DTH) satellite and digital cable. There’s also a large existence of analog cable TV users in India, who pay almost half for cable television when compared to digital subscribers, so have low propensity to shift to IPTV,” said a Gartner press release.

The Indian Government has set aggressive targets for increasing broadband coverage, but even with strong growth, the penetration will stay low for the next five years. In 2006, the size of the consumer broadband market in India stood at 1.6 million lines and is expected to grow to 6.4 million by 2011.

Ms Neha Gupta, senior research analyst, Gartner, says: “Carriers should consider moving into DTH satellite to help secure customers who can later be converted to IPTV or offered interactive services through a hybrid DTH-IP broadband STB. Alternatively, carriers could partner with DTH operators to offer customers a hybrid STB capable of accessing DTH for channels and using broadband for video on demand (VOD) interactivity. The hybrid model offers an inexpensive route to triple play, while providing extra revenue through cross-selling pay-TV to broadband and voice customers. Such partnerships have collectively added around 1.5 million subscribers in the US, and we envision a similar success in India.”

Pricing norms

Gartner pointed out that under the pricing regulations imposed on the pay-TV industry, IPTV will effectively be priced at the same level as digital cable and DTH, resulting in average revenue per user in the range of Rs 300 to Rs 500, as opposed to analogue cable users paying Rs 150 to Rs 300.

“IPTV therefore will not be able to differentiate itself from digital cable or DTH players in terms of price,” the research firm said.

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