Bharat Sanchar Nigam Limited launched on Thursday its multi-play service offering Internet Protocol television and video-on-demand to its broadband customers.

The company also announced plans to launch it in Bangalore, Chennai, Kolkatta and Hyderabad in the next 3-6 months.

BSNL has become the second telecom company following Mahanagar Telephone Nigam Ltd to launch the converge services using its copper lines infrastructure.

Pune-based Divinet,  a technology solutions company, focusing upon multi-play, has provided the end-to-end solution and Maharashtra Knowledge Corporation Ltd will be the content and deployment partner.

BSNL has tied-up with Shemaroo for video-on-demand and has a collection of 400 movies initially. It has also tied up with Worldspace satellite radio.

"Soon we will launch television education, interactive courses, network games, TV to TV interaction, audio and video talk back and messaging," P R Eknath of Divinet said.

The BSNL multi-play broadband would require a set-top box called WICE (Window for infotainment, communication and entertainment), which costs Rs 3,950.

It can also be rented for a fixed monthly charge of Rs 100 along with a security deposit of Rs 1,500. It comes with a one-time installation charge of Rs 600 and other services and taxes as applicable.

The service cost would vary from Rs 285 for just IPTV to over Rs 800 per month depending on the VOD package.

"BSNL is targeting 70,000 customers to avail its multi-play service over the next 12 months," said G K Agarwal, chief general manager, Pune, BSNL.

Value-added services, which include short messaging service, multimedia messaging service and games on demand to name a few, contributed Rs 100 crore (Rs 1 billion) to BSNL's overall revenues in financial year 2005-06.

"VAS will grow from Rs 100 crore in FY'06 to Rs 500 crore (Rs 5 billion) in FY'07 and thereafter we will add Rs 2-300 crore (Rs 2 to 3 billion) to our revenues from VAS every year," said AK Sinha, chairman and managing director, BSNL.

The telecom major has invested Rs 700 crore (Rs 7 billion) since 2005 in expanding its broadband network to cover 800 cities and towns. Over the next three years, the company plans to invest a similar amount each year to further expand its broadband network to cover the entire country.

"We will invest Rs 800 crore (Rs 8 billion) per year for the next three years," said Sinha, adding that by December this year its coverage will extend to 1,000 cities, 20,000 villages and in rural areas covering a 100 blocks, BSNL will deploy a wireless broadband.

With this investment, "BSNL's subscriber base of nine lakh connections will see an addition of five million broadband connections this year and six million broadband connection in 2008 and 2009," said Sinha.