A 256 kbps broadband connection can cost upto $40 a month. There are only 1.7 million broadband users, and yet most Indian telecom operators are dreaming about an IPTV future. Talk about Unreality TV! India’s state owned telecom operators BSNL and MTNL have been making a […]

via Maciej Dakowicz Flickr Photo Stream A 256 kbps broadband connection can cost upto $40 a month. There are only 1.7 million broadband users, and yet most Indian telecom operators are dreaming about an IPTV future. Talk about Unreality TV!
India’s state owned telecom operators BSNL and MTNL have been making a lot of noise lately about the roll out of IPTV services. Both have recently signed franchisee agreements for content delivery services. Private players like Reliance and Bharti Telecom have also jumped on the IPTV bandwagon. All of them say they will be offering IPTV commercially by the end of this year or early next year.

There is a sense of panic because fixed line connections are declining, and services like IPTV are being seen as potentially huge revenue generators. News articles — no doubt channeling executives from these companies — talk about several hundred Bollywood and Hollywood movies expected to be made available on-demand. Not so fast!

India has a measly 1.7 million broadband connections, just about half of what the government envisaged, because broadband prices are still too high. You can get what operators here call a broadband connection (128kpbs–snort!) for $5-$6 a month. Though cheap enough, that amount only covers data transfers of 200-250 megabytes, and you have to pay by the megabyte if you run over. Unlimited broadband at 256 kbps can run as high as $40 for home users and even higher for businesses.

For IPTV to really work, bandwidth prices have to come down so broadband can grow, says Jude Pinto, co-founder of research firm indiabandwidth.com. IPTV providers also have to contend with a highly fragmented cable television segment that has a much broader reach than its telecom firms — India has thousands of small cable operators, reaching more than 60 million households.

Then there is the issue of content. As indiabandwidth’s Pinto says, “If a BSNL deputy general manager is going to decide what IPTV will offer, you can just imagine.” (You can see what he means.) The bigger issue though is that the content industry is hugely fragmented. And forget the hundreds of Bollywood movies that IPTV players are talking about.

Even big Bollywood players don’t quite get things like making movies available on new platforms, licensing issues, etc. “I’ve met people in Bollywood who say, ‘Do what you want but I need four crores (about $1 million) in cash, now,’ ” says Sridhar Pai, an analyst at Tonse Telecom. No surprise there. These are the guys who used to, or still do, stash money in false ceilings and mattresses.

Reliance, for one, has already started buying content developers. Pai is quite bullish about Reliance’s IPTV prospects. “They are very conscious about price points and they have been working quite hard at it (with Microsoft and Cisco),” he says, adding that with the company’s push into retailing, the opportunities IPTV could offer — like grocery shopping using your IPTV remote — are limitless.

And yes, if this does work, it’s all about being able to get your preferred content when you want it. That could be really attractive to the urban, traveling set. Three-day weekend coming up? You can get all the episodes of the soap Kyunki Saas Bhi Kabhi Bahu Thi (Because a Mother-in-law was also once a Daughter-in-law) for a marathon viewing session. Imagine the joys — and the agony.

Just like waiting for IPTV in India.

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  1. Randhir Reddy Tuesday, August 29, 2006

    It’s not $40 a month, it is $20 (Rs.900) for the BSNL unlimited broadband connection @ 256 kbps.

  2. the big battle currently is around DTH (direct to home) satellite service. It’s between TataSky and DishTV, thank god for new offerings…the local cable operators are worthless.

  3. You are missing teh big picture here. Actually IPTV itself can act as a catalyst in increasing the broadband penetration. Because, nothing much has been done to attract the non-techie folks to the broadband bandwagon. For non-techie user, broadband doesn’t make sense when all he/she does is checking mails. So IPTV can be a great tool in selling broadplans plans to a layman.
    And in my perspective, India makes good case for IPTV due to the “unorganized” nature of the cable business. Ask any Indian and he will tell you how tough it is to deal with “cable-wallah”. So people would be ready to pay a premium in exchange for better service and user experience.

    But it takes time to evolve and more importantly a big player to make siginifcant investments. The latter seems to be happening if one were to look at what Reliance is doing. They are sewing together different elements: they bought stake in Adlabs which owns copyrights of many popular Bollywood flicks, they are trialing with some IPTV middlewear vendors.

    So I wouldn’t write-off the India IPTV story as of now..

  4. IPTV on 256KBPS broadband ??? Reliance broadband SUCKS! Forget IPTV they will come with Reliance BlueMagic DTH very soon.

  5. You can even avail Limited (400mb download+upload limit) BSNL broadband connection for even $6 (Rs.250)

    Probably, the introduction should be
    “A 256 kbps broadband connection is available from $6 to $40 a month” :)

    Also, the 1.7 million broadband user base is because for the increasing broadband penetration for the past 1-2 years in majority of Indian homes. At this rate of growth which is increasing at a good phase, IPTV can really be reality soon.

    Who on earth would have thought 10 years before that the Mobile revolution in India would put it in the 2nd place for number of mobile users, but it did happen, in the same trend IPTV is here for a reason.

  6. How ablout sling?

  7. One point that many are missing here…its not only about price, but about the bandwidth as well.

    From my limited knowledge, IPTV needs bandwidths in excess of 2Mbps per user. Do we even have that kind of offers from BSNL etc in India? And at what price?

    Shailaja, from most of my Indian contacts I get to hear that the bandwidths on offer in India are really low. Do you have an idea if there is a technical reason for this (the state of the network?) or just price issues?

  8. Manish, BSNL does offer bandwidth to the extent of 2mbps but thats for corporate users. For home users currently you can get 1mbps for rs.3300. My point was in coming years the rates would go down and the offered bandwidth will get increased for sure.

  9. Shailaja, the Reliance getting into retail is different from the Reliance that is into telecom. And, the way they squabble I don’t see grocery shopping via their IPTV network.

  10. The cost of acquiring a broadband connection in India is not as high as the authot has pointed out. Maybe the author needs to do a little bit more accurate homework before publishing the article? Whilst the debate on low penetration of broadband becoming a hindrance for IPTV will rage on for some time, my personal opinion is that the penetration could jump from 1.5 million to 10 million in just a few months given the fact that almost 13-14 million PCs are being sold on a quarterly basis in India. Add to this a burgeoning middle class with disposable incomes and the script for broadband players couldn’t have looked better. If one get to see unheard of rapid depolyment and expansion of broadband and IPTV services, it has to be only in India. 12 months from today, the India consumer will have multiple choices to view his/her favourite content – DTH, IPTV. The focus will then shift to quality of service and pricing, which in my opinion, is the best that the consumer can ask for. Who said India is behind in deployment of state-of-the-art technologies? Forward ho, India.

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