Mahanagar Telephone Nigam [Get Quote] Limited has become the first company to blend entertainment with communication by launching the interactive Internet Protocol Television in Delhi.

MTNL hopes to get about 40,000 of its existing broadband customers (about 3 lakh) to subscribe to IPTV. The services in Delhi will start from November 1, with a basic monthly rental of Rs 125 for more than 30 free-to-air channels and Rs 500 as security deposit.

For the set top box, consumer has to pay Rs 1,000 as security deposit. For those who want to see pay channels you have to pay Rs 5 per channel. MTNL will offer 150 channels which include both free to air and pay.

The subscribers could avail host of services like - video calling, gaming, video on demand and different pay channels, each at a flat rate of Rs 30 per month for the regular users. A separate bouquet has been prepared targeting business class with slightly higher changes.

The bouquet also includes time-shifted TV -- a technology that enables a subscriber to watch last one week's television content aired by any available channel at the push of a button.

The music and video on demand will have a huge library of celluloid movies that will be available both free and pay with select preview option for choice and selection by the subscriber.

All MTNL subscribers having broadband facility in Delhi can avail three-in-one service of cable TV and Internet with basic telephony.R S P Sinha, CMD, MTNL said on Monday: "We have a large subscriber base of broadband customers, and we have already received sizeable inquiries on IPTV. We would like to target these subscribers first and then fixed line users for our IPTV."

MTNL has tied up with Aksh Optic fibre and UT Starcom for the delivery of IPTV. MTNL will be issuing a common consolidated bill for all the three services -- phone, broadband and IPTV -- together from January 2007.

"MTNL has also planned to offer set top boxes free for the proposed Conditional Access System (CAS), where an interest bearing fixed deposit for 5-years will be created in the name of the customer and the entire interest will fund his investment.  

"Along with it the entire video data beamed through IPTV would be charged as a fixed monthly amount, independent of usage by the customer. IPTV would allow subscribers to use an interactive system, for which can be used for trading of stocks, e-shopping at big bazaar, while watching a news broadcast channel," Sinha added.

The tariff structure has been priced aggressively against DTH and cable TV. "We are offering the future of home entertainment and communication at half of the market prices. It will integrate the television broadcast with other internet operations in India for the first time," said, Kailash Choudhary, MD, Aksh Optifibre Ltd [Get Quote].