UTStarcom is riding high on broadband and IPTV uptake in the Indian market. Considered to be a formidable player in the segment, the company foresees a strong business case for IPTV services in India. UTStarcom South Asia MD, Vijay Yadav shares his view points in an exclusive interaction with TelecomTiger.
Q1) A lot has been said and written about advantages of IPTV over DTH. The advantages however have not been able to work to advantage of IPTV services where in the real scenario uptake of IPTV services as compared to DTH is very low in India. As a technology solution provider to IPTV service providers, how do you view the situation?
Ans: First of all, whenever a new technology comes in, different people have different ideas of how to position their products, and there are certain service providers who are positioning it as more superior than DTH, and in several ways, it is. However, we, as technology & solutions providers look at IPTV quite differently. From my perspective, IPTV is not a technology or a service which is competing with DTH, or for that matter with any of the other forms of TV access currently available like digital CAS, and analogue. IPTV is complementary to the current forms of services.
Besides, comparing IPTV with other forms of broadcast is not right as it would be the same as comparing mobile phone with fixedline, which people did 14 years back, when mobile phones first came. But now we have learned that you can’t compare these two products. It would be a similar case with IPTV and DTH or other forms. IPTV as a service will augment what is already there on DTH and thereby complementing it the way mobile phone complemented wireline.
Coming to your second point, uptake for IPTV is obviously lesser, since DTH as a technology has been around for more than a decade, and in India it has been available for more that 2 to 3 years. IPTV, serving a hi-end need, will initially reach to a limited numbers. For a technology in its first year, the subscriber rates for IPTV are still quite descent.
Q2) IPTV services depend a lot on uptime of broadband connectivity provided by the operators. Indian operators are not known to have satisfactory level in terms of delivery of services, revealed Trai study reports. What should be done to change this perception as well as overcome the challenge?
Ans: Broadband is deployed largely on brass-copper line and marginally on fiber. It’s a well-acknowledged fact that voice services on wireline are turning out to be more reliable as compared to wireless. With the quality of data or bits traveling on the fixedline being better than wireless, the standards are itself very high.
Compared to other countries, we definitely have a less superior quality, but the quality can be driven if more services are carried out on the wire.
Technically speaking, broadband is a pre-requisite for enabling IPTV. However, interestingly, we feel that IPTV will drive the growth of broadband especially in India. In simple words, the market will drive the need and the need will drive better quality due to competition among service providers.
In the current scenario, when the broadband goes down or doesn’t deliver a quality up to the mark, the user in a home scenario doesn’t care much. Once users start using broadband for video services like IPTV, they won’t tolerate poor broadband connectivity and will put pressure on service providers to deliver better quality. I know of people who can tolerate their phone lines being down for half day, but not their TV for half hour. Broadband connection can be made very reliable – the technology and solutions exist; when users start absolutely insisting that it has to be always-up reliability, the service providers will start enabling. Once the demand for quality broadband increases, it will automatically result in better services being delivered. In today’s consumer-driven market, service providers who continue to deliver sloppy services cannot survive for too long.
Q3) Another issue which is very ironical is that IPTV is mainly limited to a very limited addressable market i.e. fixedline subscribers having broadband connection though efforts are made now to reach out to even those subscribers without fixedline connection. Do you think the addressable market available now commands a viable business case for operators?
Ans: From our perspective, IPTV can be extended to two categories of people, first being the ones who already have wireline or fixedline connection, which can be addressed easily. The second category comprise of people who need the connection. In a premise, where wire is not there, as long as the wire can reach the place, it is a matter of business case to us.
For obvious reasons, India is not limited by wire which is already in place. But, if there is a business case, then people will go ahead and put in an additional wire. It brings us to the same point that I have said earlier, IPTV will drive the growth of broadband. The size of market that we’re talking about already is not small. The amount of copper lines in the country is already 70 million, though the voice users on wireline in the country are somewhere between 45-50 million. Once IPTV starts driving growth of broadband, this extra unused wire will also become more valuable.
Furthermore, the market which we are talking about is not a small one. With IPTV offering a bouquet of features, to the extent that we believe, India doesn’t any longer need a ‘$100 PC’ to bridge over the digital divide, as we already have ‘$100 TV’ in the form of IPTV that brings the power of interactivity to your humble TV remote itself! Therefore, people will move to wire and opt for broadband just to experience the benefits of IPTV.
Q4) Globally PCCW is considered to be the ideal case study where the launch of IPTV services helped the company in not only keeping a check on drop in fixedline services but rather witnessing addition of new subscribers for the services. Do you foresee such a possibility happening in India especially in case of BSNL?
Ans: PCCW is a good success story for IPTV in Hong Kong. But I believe that in India, IPTV will be a greater success. But at the same time there are greater challenges as well.
If I talk about the biggest challenge for IPTV in India, which is unique to our country then that would be the fact that ours is the only place where one could get 150 channels for Rs.150, or roughly $3 for 150 channels. PCCW never had to consider such marginal pricing.
Secondly, Hong Kong is a country with a small population. Here in India, even with a 10 percent penetration, we will far outdo the numbers that are talked of in past success stories. The whole business case dynamic is quite different.
IPTV will be a far more relevant technology to India as compared to any other country.
As of now, we see it working out very well with MTNL and BSNL and Airtel. BSNL and MTNL, with an enormous reach of the wire and Airtel, with the zeal of creating innovative services, are both performing well. In addition, quite a lot of other operators with good wireline plans will contribute a lot to IPTV success in India. All we have to keep in mind is that this is the first year of commercial operation of the service and for a first year, it has done well. We need to keep our faith and give it some more time before we start seeing the ripple effect to build up. It is a natural progression for any new technology that initially the adoption is slow and then starts picking up very fast.
Q5) Do you see any scope for government incentives to be extended to drive uptake of IPTV services in the country?
Ans: Our belief is that IPTV will be more relevant for non-computer-literate people in rural and urban India. We believe that IPTV should be treated like an infrastructure service. If the government invests in setting up the infrastructure, then really the reach can be phenomenal. IPTV has the potential to change from a TV medium to an information medium and then to a productivity tool. Let’s see what information mediums a non-computer-literate person has today – practically nothing! He needs to travel to a library to access any information, that too only during working hours. If this information is provided to people in simple audio-visual form, they are still as capable of absorbing it as much as any computer literate people. We already have many informational programs created and available in the country; however their value remains low because they are being broadcasted at specific timings. The viewers may not need that information when it is being broadcasted – or they may not be aware of the broadcast timings even if that information is relevant to them. However, in IPTV, such informational clips are stored on a server, and viewers can seek them out based on their preference or relevance at their preferred time. For example, using IPTV, a lady can watch a program on neo-natal care when she is pregnant, and another person can watch a program on managing diabetes or cancer when he is diagnosed with it. Farmers can watch programs on taking care or Khari or Rabi crops in relevant seasons, or pest control techniques when his crop is attacked by them, and so on. The IPTV medium on our TV remote is so simple to use that even our grandparents can use it.
There are forums and industry champions working towards achieving infrastructure status for IPTV.
While I can’t comment on the decision makers, yet I have surely seen a lot of openness on the part of government towards acceptance of new ideas that help the society. Less than a year back, we didn’t even have an IPTV policy. But various industry forums impressed the need of having a policy to the government and now we do have a new policy. Thus, if these forums are able to convince the government about the fact that IPTV is an infrastructure that will immensely benefit the country and the masses, and if the government also sees value in the interactivity of the technology and decides to invest, then the growth of IPTV will be truly amazing.
Q6) Do you expect the market dynamics to change dramatically post entry of private operators in the field?
Ans: Entry of any new operator spells competition for existing ones. We believe that healthy competition leads to better services for the consumer and helps grow the addressable market. I don’t specifically differentiate between private and government because, in telecom, both private and government operators have contributed a lot.
Similarly, with IPTV, we see equal amount of participation and enthusiasm from both government and private operators. Both are equally important at driving IPTV growth and we will continue to work with both.
Q7) It is expected that wireless broadband will dominate the broadband landscape in India in next few years. From an operator’s perspective, what should be the approach to migrate IPTV infrastructure from a fixedline environment to wireless medium?
Ans: By broadband, if you define an internet access at acceptable speed, then wireless will be a dominant player, but if you define broadband the way it is defined by many countries as 2 mbps dedicated, or even as defined by TRAI as 256 kbps dedicated, then wireline will continue to remain the dominant player. Providing 256kbps dedicated on wireless is very cost-prohibitive.