Mahanagar Telephone Nigam Ltd has already launched IPTV in Delhi. Its partner, Aksh, may soon tie up with Zee and ESPN too since content and pricing will hold the key to success as others join the fray.
Internet Protocol Television, launched recently in New Delhi, has received a big boost on the content front with Aksh Optifibre having tied up with Star Network in India.
Confirming the development, K S Choudhari, managing director, Aksh Optifibre, says: "We have tied up with Star and by December-end we hope to have ZEE and ESPN Star Sports as well. Currently, we have 24 channels including eight from Star and are negotiating with a global rights' holder for content that will give us a presence in the Hollywood and Bollywood fare."
The company has started rolling out operations in Delhi in association with MTNL, which will provide its exiting base of broadband subscribers in Delhi and Mumbai (stated to be around 200,000) and also the new ones. The company claims to be already present in 75 homes; in three years, it's looking at half-a-million homes.
"This is not an unrealistic estimate. Delhi has three million C&S subscribers and it's reasonable to expect 15 per cent of the market - bulk of it will comprise offices for video conferencing that IPTV offers," reasons Choudhari.
The Aksh-MTNL IPTV service will be priced aggressively and will have tariffs comparable with DTH or cable TV. The minimum service fee including the rental and a basic service will be Rs 135 per month, taxes extra.
The fee, the company claims, is delinked from traditional billing for broadband usage and the video data beamed will be charged as a fixed monthly amount, independent of the number of hours or MB used.
If one were to compare different viewing media, users will be able to enjoy all channels they currently see through traditional cable systems or DTH (direct-to-home) with additional features such as time-shifted TV at approximately Rs 280 per month.
The system is also CAS-ready (no separate set-top box required) and the resultant fee rationalisation for pay channels will automatically be adjusted in the monthly charges.
The deposit for the IPTV set-top box is also being charged in an innovative fashion. The one-time deposit will be converted into an interest-bearing fixed deposit for a five-year term in the consumer's name.
"The entire amount (with interest) will be paid back to the consumer upon maturity or elective termination of service and return of the set top box, whichever occurs earlier. We will be tying up with Punjab National Bank for this," says Choudhari.
IOL Broadband has already announced its commercial launch in Mumbai in a similar association with MTNL, and has brought Star on board as well, along with the free-to-air channels. This makes IPTV a reality today. There are hurdles, though.
The Telecom Regulatory Authority of India has reportedly declared the MTNL service illegal and asked the Ministry of Information and Broadcasting for a legal ruling.
Choudhari of Aksh Optifibre, however, opines one cannot really club IPTV industry with IPTV "which is closer to the telecom industry because of the services it offers". He adds: "In any case, TRAI views IPTV segment in a positive manner. We are waiting for a formal communication on the issue and really see no problem whatsoever in our plans or IPTV's progress."
That issue apart, can IPTV really take-off, considering it depends heavily on broadband? While MTNL has the largest number of broadband connections, others gunning in the fray include players like the Anil Dhirubhai Ambani Group and Bharti Tele-Ventures.
"The concept has been a success in Hong Kong. And as IPTV is the latest entrant, it will take some time to pan out. But there is no reason why it should not take off," asserts Rajesh Jain, national industry director for ICE, KPMG.
There are 65 million C&S subscribers in the country, which is set to rise to 125 million households in another five years. And significantly, the subscription-led revenue will overtake the ad-led revenue for the industry.
For instance, if the current ad to subscription ratio stands at 1:1.5, it will be 1:2.5 in the next five years. What's stopping IPTV is the content. Once that's in place, it is bound to grow," predicts Jain.
Aksh is looking at money to flow in from the 'T-shopping' where consumers can actually watch personalised advertisements and click and actually place orders on TV thought their remote.Right now most of the content is free. Finally, the company is also working on its new brand name: It will be an Aksh-MTNL co-brand. We are right now also working on launching our service in Mumbai in the first quarter of 2007," says Choudhari.