Smart Digivision is a new breed of IPTV operator, common to the Indian market, which does not own the fixed-line network over which it delivers IPTV services but rather works with local fixed-line operators and assumes complete responsibility for the acquisition and delivery of content over these networks, as well as the acquisition and billing of subscribers. 

We speak to Kapil Dev Kumar, COO of Smart Digivision to learn more about the new service and this uniquely Indian model of IPTV delivery.

The company, which launched its IPTV service 'MyWay" earlier this year, has big plans for the Indian market - it states that it aims to reach 3mn subscribers within the next couple of years, and is working with dominant fixed-line operators BSNL and MTNL in order to achieve this goal.

What kind of potential do you see for IPTV services in India?

With a population of over 1bn and more than 200mn households, the potential for an advanced two-way pay-TV services is huge.  Furthermore, there are currently 6.5mn broadband households in India, and that figure is growing by around 200,000 households each month.  IPTV is presently the only two-way service available on the Indian market, as cable operators here have not yet made the transition to digital cable services, such as those available in Europe and the US.

Two months ago we started commercial operations in 20 cities across India, which we expect to account for around 80% of our customer base; we will be rolling the service out to a further 34 cities in the next six months, which we expect will account for the remaining 20% of our customers.

How do you plan to differentiate your service?

Our approach is to offer standard entertainment services such as linear   elevision, along with video-on-demand and a number of other rich interactive services - we want to offer deeper and wider services to our customers than those currently available.  These will include information on the TV, such as news and weather, and online transactions such as the purchasing of air and rail tickets, and online banking.  More will be launched over the next six months, including the provision of computer experiences via the set-top box.  We are working with our set-top box partner, AirTies, to enable users to open and view word processing and spreadsheet documents on their television via their set-top box, as well as browse the Internet.  This functionality should be available to our customers by the end of this year.

We already offer the ability to send SMS via the television to mobile phones, access to popular email clients such as Gmail, interactive games, music, karaoke services, an educational application in the format of a self-testing quiz, and a mapping application similar to Google Maps, delivered with our partners at MapmyIndia.com, to which we will be adding more information such as nearby restaurants and ATMs in the near future.  We are also close to launching a user generated content application, enabling subscribers to share their photos and videos with family and friends over the MyWay network.

Over the next couple of months we plan to launch online transactions on the service, enabling users to book movie tickets and purchase airline tickets, and sometime in August we intend to activate a feature enabling users to attach storage to their set-top box via a USB connection to facilitate PVR capabilities.

What level of pricing is the service being offered at?

The pricing of pay-TV services in India is very aggressive, and we have to pitch our service accordingly - we are currently offering two main packages: the basic package costs around US$ 4 per month, and a bigger package is priced at around US$ 6 per month.  This is in addition to an upfront fee of around US$ 40 for the set-top box, which includes three months worth of subscription.

How does the model work for delivering IPTV services over the fixed-line networks of BSNL and MTNL?

We are entirely responsible for the acquisition and delivery of content to subscribers, including customer acquisition, service provision and billing.  The fixed-line operators are responsible for providing the broadband pipe that our content is delivered over, but that is all.

It is common in India for a telecoms operator to bring in a specialist private partner to acquire content, whether that be for an IPTV service or for a mobile telephony service offering such things as ringtones and wallpapers.  By bringing in a private partner, the fixed-line operators here feel they can better acquire content, with around 15-20% of revenues typically going to the content partners.

How are the revenues shared for Smart Digivision's IPTV service?

We have different models for different aspects of the business - for broadcast (i.e. linear) services, we receive 90% of revenues and the fixed-line operators receive 10%, while for non-broadcast services such as video-on-demand and interactive services, we receive 70% of revenues and the operators receive 30%, and from advertisements on the service, we receive 80% of revenues and the fixed-line operators receive 20%.

How does this fit in with companies such as Aksh Optifibre, who also deliver IPTV services over the networks of BSNL and MTNL?

The fixed-line networks of these two operators can accommodate both us and our competitors such as at Aksh - however they can support no more than two IPTV services.  Out of the 54 cities in which we operate, we are the only operator in 29 of those, including Chennai, Hyderabad,  and Bangalore and Kolkata, and we compete in another eight cities with Aksh Optifibre.