Deployments are expected this year but there is general agreement that India needs widespread access network upgrades before IPTV can make significant progress. Philip Hunter looks at the state of play today

Viable market?

The big question is just how large and viable the Indian IPTV market is, with estimates of the value and size varying by almost two orders of magnitude. The country’s population is just over a billion, of which 30 per cent live in about 200 towns and cities. This would seem to size the potential catchment for IPTV-via-DSL at around 400 million, including most of those in the towns, plus some in villages sufficiently close to an exchange.

On the other hand, only a small - though fast growing - proportion of these could afford IPTV services at present. The number of TV households gives another figure, and this stands at around 80 million, of which 35 million are on cable. But many of the cable subscribers receive pirated content, for which they pay a meagre amount or nothing at all, so it is questionable how many would be willing, or could afford, to pay a viable IPTV subscription comparable with rates elsewhere in the world. There are signs though, that operators recognise how sensitive pricing is and are planning to come in with aggressively and flexibly priced packages (more later).

600,000 lines

Perhaps a more realistic sizing of the immediate market would be to count the number of activated DSL lines, which currently stands at about 600,000 based on recent projections. This has doubled over the last year. But even this can be misleading, for the Indian government has adopted a rather lenient definition of broadband as being a circuit delivering bandwidth of 256Kbps or more, which is about a sixth of that required for delivering decent standard-definition video, even with H.264 (MPEG-4 Part 10/AVC) advanced encoding. In practice though, the lines India currently defines as ‘broadband’ go anywhere from 256Kbps over copper to 100Mbps Ethernet running over optical fibre.

Greater reach

This vast range of bit rates plays to IPTV’s strengths, as Daniel Marcus, UTStarcom’s product marketing manager, with a keen interest in India, observed. As Marcus points out, all sorts of IPTV service offerings are being tried in India, including some at 128Kbps. “The picture quality may not be great, but at least it brings TV to people who otherwise couldn’t get it.” The point is that IPTV can exploit a variety of transmission and encoding technologies to cope with different rates of delivery. Even so, there is general agreement that for India’s IPTV business to become big time, there must be a widespread upgrade of the access network. “Large scale roll-out cannot take place until the coverage is much better,” agrees Thierry Fautier, director of IPTV solutions at transmission equipment and solutions vendor Harmonic Inc. “At present we’re just seeing pockets of deployment.” India is often compared to China in its development of IPTV, being an emerging market characterised by a new middle class able to afford subscription TV services for the first time. However, there are significant differences.

“China has a lot of vendor push, while in India there are no local vendors, so there is not the same lobbying at the state level,” says Mr. Fautier. In India the government is doing a lot of the lobbying, through its state owned carrier Mahanagar Telephone Nigam Ltd (MTNL) and also via initiatives to promote IPTV in general. For example, Indian IT and communications minister Dayanidhi Maran has been urging the Department of IT and Centre for Advanced Computing to collaborate in the development of an Indian language translation browser for accessing VOD and time-shifted content.

Reduce churn

MTNL is one of the big three Indian IPTV operators, and as the only state-owned one, hopes that by being quick off the mark with IPTV it can halt a progressive erosion of customers to its two more aggressive commercial rivals, Reliance Infocomm and Bharti Telecom. Indeed, MTNL has announced plans to start rolling out its IPTV service called TRI-BAND early in 2007, initially in New Delhi and then Mumbai, targeting 200,000 broadband subscribers in the first year and aiming eventually to address a market of 3.9 million. At MTNL, Time Broadband is working with Hewlett Packard for the systems integration based on the former’s content delivery network, with Optibase providing the encoders and Kasenna the middleware, using Amino’s set-top boxes, which support full H.264 encoding. A significant move, given India’s history of piracy, is use of technology from Verimatrix for detecting cloned set-tops, and integration into the STB of Alpha Tec’s VideoMark software for imprinting and detecting digital watermarks. Without such security measures, no IPTV service in India can hope to succeed.

Reliance Infocomm

Both of MTNL’s commercial rivals hope to pre-empt MTNL by a month or so by starting IPTV roll-outs before the end of 2006. Reliance Infocomm is perhaps the biggest hitter, expecting IPTV to continue the mission set out by its late founder Dhirubai Ambani of bringing affordable digital technology to India’s masses. On the back of the world’s fastest-ever mobile network deployment, the company has net profits just short of $1.5 billion and an 80,000km terabit fibre optic network connecting most towns and cities. This has also given the company a countrywide network of shops through which IPTV services can be serviced and supported. Many analysts give Reliance the best chance of repeating its success on the mobile front with IPTV. Yet like the others, Reliance’s initial stabs into the IPTV market stuttered to a halt. It had ambitious plans to develop a service called Netway to subscribers sufficiently close to its core network to have 100Mbps Ethernet connections. The service has failed to gain traction for various reasons, with problems building up subscriptions and with constructing a compelling content package.

However, Reliance has been quick to learn and is tackling both these problems. On the content front it is taking matters in-house through a variety of developments and acquisitions, including the taking of a 51 per cent stake in Adlabs, a film production and distribution company. And in the hope of attracting more customers, it is considering a range of aggressive pricing options. It is thought likely that these will involve a low flat fee comparable to current cable TV rates of around $2 a month. Then there will be a variety of pay-for-use options, perhaps around $1 per movie and about half that for music videos or songs. Reliance hopes that such pricing will entice users accustomed to the bargain rates for pirated CDs and content via cable networks, although surely IPTV must exploit its potential to provide access to very large amounts of content for reasonable prices to entice large numbers from existing TV services.

Reliance has strong technology partners, notably Microsoft since 2003, with continued rumours that the relationship has been consummated financially. Others are Cisco and Harmonic. The carrier has been running a trial in 2,000 homes on the Microsoft TV platform and is negotiating with Motorola for set-top boxes. Microsoft chief executive officer Steve Ballmer recently confirmed that his company was considering taking an equity stake in Reliance "due to the immense potential of the IPTV business in India."

Bharti Telecom

The third contender, Bharti Telecom has, like Reliance, a strong mobile base to build on. In fact it is slightly ahead with 21.9 million mobile subscribers in the second quarter of 2006, or about 20 per cent of the Indian total, while Reliance has 21.25 million, according to Broadband & Convergence India. Bharti currently has a trial in cooperation with UTStarcom in Gurgaon just outside New Delhi. This uses UTStarcom’s digital headends and set-top boxes, as well as its RollingStream IPTV platform. It looks then, as if 2007 will be the year IPTV really gets going in India as the three big operators, alongside some smaller ones, exploit the two main telecom networks from BSNL and MTNL. The message so far is that the pricing must be highly competitive and must also exploit the ability of IPTV to deliver innovative packages of services. There is also a considerable challenge acquiring and bundling content, and a decided emphasis on security to reassure the content owners that the piracy problem is under control.