The Future of IPTV

in India

Manish Sharma

12.08.2007

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 Table of Contents

1. What is IPTV ?

2. How it works

3. Why do we need IPTV, yet another means of delivering

Television?

4. IPTV in India

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What is IPTV ?

IPTV or Internet Protocol Television describes a system capable of

receiving and displaying a video stream encoded as a series of Internet
Protocol packets. However, when one discusses IPTV one is talking
about watching traditional channels on television, where people
demand a smooth, high-resolution, lag-free picture, which is essentially
delivered using Internet Protocol.

A more general definition of IPTV is television content that, instead of

being delivered through traditional broadcast and cable formats, is
received by the viewer through the technologies used for computer
networks.

How it works

To be able to watch IPTV channels on a TV set, a subscriber needs a

set top box (STB) much like the ones used in a DTH/or a conditional
access system. The box will connect to the home DSL (broadband line)
line and is responsible for reassembling the packets into a coherent
video stream and then decoding the contents. A computer could do the
same job, but most people still don't have an always-on PC sitting
beside the TV, so the box decodes the signal for a conventional
television.

Most video enters the system at the telecom operators national headend,
where network feeds are pulled from satellites and encoded if necessary
(often in MPEG-2, though H.264 and Windows Media are also
possibilities). The video stream is broken up into IP packets and
dumped into the operator's core network, which is a massive IP
network that handles all sorts of other traffic (data, voice, etc.) in
addition to the video.

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The video streams then are received by a local office, which has the job
of delivering the content to subscribers’ home. This office is the place
that local content (such as TV stations, advertising, and video on
demand) could be added to the mix, but it's also the spot where the
IPTV middleware is housed. This software stack handles user
authentication, channel change requests, billing, VoD requests, etc.—
basically, all necessary infrastructures.

All the channels in the lineup are multicast from the national headend
to local offices at the same time, but at the local office, there is a
bottleneck in the form of the local DSL loop, which has nowhere near
the capacity to stream all of the channels at once. Cable systems can do
this, since their bandwidth can be in the neighborhood of 4.5Gbps, but
even the newest ADSL2+ technology tops out at around 25Mbps (and
this speed drops quickly as distance from the DSLAM [DSL Access
Multiplier] grows).

So how does a telecom operator send hundreds of channels out to an

IPTV subscriber with a DSL line? Simple, they only send a few at a
time. When a user changes the channel on their set-top box, the box
does not "tune" a channel like a cable system. (There is in fact no such
thing as "tuning" anymore—the box is simply an IP receiver.) What
happens instead is that the box switches channels by using the IP Group
Membership Protocol (IGMP) v2 to join a new multicast group. When
the local office receives this request, it checks to make sure that the
user is authorized to view the new channel, and then it directs the
routers in the local office to add that particular user to the channel's
distribution list. In this way, only signals that are currently being
watched are actually being sent from the local office to the DSLAM
and on to the user.

Now, when one watches videos on YouTube or a television channel on

Jump TV one is watching video streams using internet protocol,
however it cannot be termed as IPTV in its strictest sense.

>> For more on how IPTV works, please refer to this link.

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Why do we need IPTV, yet another means of delivering
Television?

There are several advantages and reasons advocated by various

commentators, technologists and industry analysts. A few of the
important ones are as follows:

- Better Quality: IPTV promises to provide better television viewing

experience in the form of digital picture and sound quality.
( Compared to the content offered from the likes of analogue cable
TV operators in most of India)

- Triple Play: Triple Play is an expression used by service operators

describing a bundle of telephony, data and video via a single
connection and which enables providers to offer three services at a
reduced cost.

- The IP-based platform offers significant advantages,

including the ability to integrate television with other IP-
based services like high speed Internet access and VoIP
(voice over internet protocol)

- Traditionally, TV has come down one wire cable TV or a

terrestrial antenna, the telephone has used another, and the
Internet has been available on either. Both cable operators
and telecom operators around the globe are starting to offer
all three on one wire, which is more "cost effective". For
the end consumer too, this service is cost effective, as they
get a “single bill” for three services at a discounted rate.

- Interactivity: An IP-based platform also allows significant

opportunities to make the TV viewing experience more interactive
and personalised. For example, the supplier may include an
interactive program guide that allows viewers to search for content
by title or actor’s name, or a picture-in-picture functionality that
allows them to “channel surf” without leaving the program they’re
watching.

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- Video on Demand (VoD) permits a subscriber to browse an online
movie catalogue, to watch trailers and to select the movie one wants
to watch. The selected movie starts playing nearly instantaneously
on the customer's TV or PC.

IPTV in India

i. Current scenario

- Cable TV companies and Telecommunications companies come

under the purview of Telecom Regulatory Authority of India or
TRAI. As per the regulations governing the telecom operators in
India, the existing operators can provide the IPTV services under
the “Unified Access Service Licence Agreement”.

- TRAI has proposed amendments in the “Cable Television

Networks (Regulation) Act, 1995” and the existing Telecom
Licenses for facilitation of growth of IPTV services in India to
sort out problems that are likely to arise if IPTV services are to
be governed by the existing Act.

- The Indian Government is currently in the process of formulating

a policy for regulating the content on IPTV.

- Mahanagar Telephone Nigam Limited (MTNL) has already

started IPTV service in Delhi and Mumbai after successful test
runs and Bharti Telecom is all set to start it at the end of this year.
In Gurgaon, the service is available to all the Airtel Broadband
subscribers at no extra cost, on a trial basis.

- There are reports that Bharat Sanchar Nigam Limited is all set to
launch IPTV services in Bangalore, Chennai and Kolkata on 15th
August 2007. BSNL has already started offering IPTV in Pune,
Maharashtra. BSNL has the capability to launch IPTV in all 708
cities and towns where it has the infrastructure for broadband
services.

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ii. The catalysts for proliferation of IPTV in India

There are several factors which have led to the successful

deployment of the IPTV model in several countries in the world.
And it is likely that it these factors would also facilitate the growth
of IPTV in India:

- Licensing: In India to start a new service or an industry generally

requires a license from the government which is major deterrent
in starting a new service or venture as it is generally a long drawn
painful process. The “Unified Access Service Licence
Agreement”, allow the existing license holders to provide IPTV
services without the need to apply for any further licenses. This
will facilitate a faster roll-out of IPTV services.

- Existing infrastructure: Technically the Indian wireline operators

are IPTV ready. Wireline telecom operators in India have
deployed a significant backbone infrastructure to provide
broadband services in India. After successful IPTV trials by
major operators like MTNL and BSNL in major cities, it is likely
that these operators will look to other towns and cities for further
growth.

- Broadband penetration: According to data released by TRAI, at

the end of quarter ending March 2007 wireline subscriber base in
India is 40.75 Million and of these the number of DSL
Broadband subscribers is 1.942 million.(which has grown13.85%
over the previous quarter). These subscribers can be targeted to
make the initial base of IPTV customers in India.

- For example: As of end June 2007 MTNL has a total of 3.67

million wireline subscribers and of these about 5,00,000 are
broadband subscribers. MTNL is currently looking at
converting this subscriber base for IPTV services, as per a
MTNL senior executive.

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 - TRAI forecasts the total broadband subscriber base in India to
expand to around 20 million by 2010

- Number of Cable and Satellite households: According to the year

2001 figures on Doordarshan’s website there were about 79.4
million television households in India, which is about 42.3 % of
the total number of households in India. There were 41.5 million
cable and satellite homes which is about ~ 50% of the total
television households. An analysis of figures from the year 2001
over the year 2000 suggests that there is a significant growth in
the number of Cable & Satellite homes in India. And if that can
be extrapolated and taken as indication of the growth in the years
to come, there is a large addressable market for IPTV that
emerges.
- Assuming that there is a significant overlap (around ~90%) of
broadband households at 20 million in the year 2010 with
C&S households say at about 70 million in the year 2010, and
it can also be assumed that the operators are likely to push the
IPTV services to the new broadband subscribers as an
additional service. So, from the current level of ~ 2 million
broadband subscribers in India, there is an addressable market
of another ~18 million subscribers in the next three years.

- Indian Economy: There is an emergence of a young population in

India with increasing disposable income, which is increasingly
looking for newer avenues of entertainment.

- Capital expenditure: The incumbent wireline operators may need

to incur capital expenditure on account of procuring and
subsidising set-top boxes, setting up of headends (centres where
television channel content is received, packaged and broadcast to
the last mile). While the initial capex could be significant, the
telecom operators with good cash flows may not feel the pinch as
IPTV opens up an additional source of revenue.

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iii. Possible deterrents to the growth of IPTV model of television
distribution in India

- Initial cost of entry: Initially the cost of entry for an IPTV

connection could be prohibitive to many households and this
could lead to a delay in wide adoption of IPTV. However, in the
due course of time with the likelihood of the costs of STBs
coming down, the service will become affordable to the masses.

- Opposition from Cable and DTH operators: IPTV poses a direct

threat to the existing cable and DTH operators in India so the
operators would try to force the policy changes for regulating the
telecom operator, which could lead to delay in roll-out of IPTV
services.

Sources:
http://www.ddindia.gov.in/About+DD/DD+at+a+Glance/TV+SCEN
ARIO+IN+INDIA.htm

http://inhome.rediff.com/money/2006/feb/08spec.htm