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IPTV
IPTV: an opportunity for telcos to boost their revenues
Neha Gupta, Senior Research Analyst, Gartner, spoke
about IPTV and the broadband market in India
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Indian IPTV market has had a slow start till now. There are primarily four factors
that affect IPTV’s deployment and growth namely broadband penetration,
level of competition, market maturity, income levels and government regulations.
The primary driver of IPTV penetration is broadband. A comparison of broadband
penetration and IPTV penetration in various regions attests to this fact. The
low broadband penetration rate in India is the biggest factor hampering the
growth of IPTV. Two secondary, but still important, factors affecting IPTV penetration
are competition and market maturity. Western Europe being a more competitive
market for IPTV operators has a higher penetration rate than North America even
though the latter has higher broadband penetration. It also has a more mature
IPTV market in that services have been around longer and more people know about
them. It will take a while before IPTV catches on in India. Another factor which
will hamper growth in India is the low disposable income of households.
Broadband is growing strongly, but the broadband penetration
rate remains low in India at just over 2%. The Indian fixed consumer broadband
market is estimated to be worth Rs 10 billion. By 2013, it is expected to grow
to Rs 22 billion. xDSL dominates the Indian fixed consumer broadband market
with an 86% market share. Broadband revenue per user is falling significantly,
due to a drop in broadband prices. Average Revenue Per User is also falling,
due to an increase in the percentage of subscribers to low-priced fixed-wireless
packages.
- The broadband sector will grow strongly,
as increased focus will be put on building the last mile of access.
xDSL will dominate through to the end of 2010
- Bundling of Voice and Broadband will become
a norm
- Broadband revenue per user will continue
to fall significantly
- Dial-up connections will continue to dominate
Internet access
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Business and technology trends
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 "IPTV
services over the next five years will struggle to gain any real momentum
and Gartner has pulled down its subscriber forecasts as a result"
- Neha Gupta
Senior Research Analyst, Gartner
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For Indian telcos, IPTV is an opportunity to tap a fresh revenue
stream. It is only rational for the telecom players to diversify to triple play
so as to ensure new revenue streams and ensure return on investment on their
fixed lines. However, the initial costs of IPTV are not insignificant. So some
telcos are skeptical about venturing into it. While their basic network is in
place, there are costs involved in aggregating content and making sure it is
in the format to be distributed. The Web’s highly distributed network of
servers and routers are currently ill-equipped to handle the stringent requirements
of video transmission. There are costs related to buffering video locally until
enough of the data is on hand to present a smooth picture. Also, Indian telcos
face stiff competition from cable and satellite operators that puts a risk on
IPTV returns and it remains an unproven potential of incremental revenue streams.
Operators have to deal with lack of awareness and interest in IPTV services.
Lack of access to differentiated content and lack of telco content expertise
is also a dampener.
Upcoming developments
Indian IPTV deployment has experienced a slow start. IPTV services over the
next five years will struggle to gain momentum and Gartner has pulled down its
subscriber forecasts as a result. We expect the Indian market to reach Rs 16
million by 2013. While many of the carriers talk about IPTV or order small amounts
of IPTV equipment, their real focus is on direct-to-home satellite services.
It’s hard to see, given the limited amount of broadband access around,
that this will change in the next five years. IPTV services will still grow
but it will target niche urban segments.
As told to Manjari Juneja
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