India’s IPTV Unreality

via Maciej Dakowicz Flickr Photo Stream A 256 kbps broadband connection can cost upto $40 a month. There are only 1.7 million broadband users, and yet most Indian telecom operators are dreaming about an IPTV future. Talk about Unreality TV!
India’s state owned telecom operators BSNL and MTNL have been making a lot of noise lately about the roll out of IPTV services. Both have recently signed franchisee agreements for content delivery services. Private players like Reliance and Bharti Telecom have also jumped on the IPTV bandwagon. All of them say they will be offering IPTV commercially by the end of this year or early next year.

There is a sense of panic because fixed line connections are declining, and services like IPTV are being seen as potentially huge revenue generators. News articles — no doubt channeling executives from these companies — talk about several hundred Bollywood and Hollywood movies expected to be made available on-demand. Not so fast!

India has a measly 1.7 million broadband connections, just about half of what the government envisaged, because broadband prices are still too high. You can get what operators here call a broadband connection (128kpbs–snort!) for $5-$6 a month. Though cheap enough, that amount only covers data transfers of 200-250 megabytes, and you have to pay by the megabyte if you run over. Unlimited broadband at 256 kbps can run as high as $40 for home users and even higher for businesses.

For IPTV to really work, bandwidth prices have to come down so broadband can grow, says Jude Pinto, co-founder of research firm IPTV providers also have to contend with a highly fragmented cable television segment that has a much broader reach than its telecom firms — India has thousands of small cable operators, reaching more than 60 million households.

Then there is the issue of content. As indiabandwidth’s Pinto says, “If a BSNL deputy general manager is going to decide what IPTV will offer, you can just imagine.” (You can see what he means.) The bigger issue though is that the content industry is hugely fragmented. And forget the hundreds of Bollywood movies that IPTV players are talking about.

Even big Bollywood players don’t quite get things like making movies available on new platforms, licensing issues, etc. “I’ve met people in Bollywood who say, ‘Do what you want but I need four crores (about $1 million) in cash, now,’ ” says Sridhar Pai, an analyst at Tonse Telecom. No surprise there. These are the guys who used to, or still do, stash money in false ceilings and mattresses.

Reliance, for one, has already started buying content developers. Pai is quite bullish about Reliance’s IPTV prospects. “They are very conscious about price points and they have been working quite hard at it (with Microsoft and Cisco),” he says, adding that with the company’s push into retailing, the opportunities IPTV could offer — like grocery shopping using your IPTV remote — are limitless.

And yes, if this does work, it’s all about being able to get your preferred content when you want it. That could be really attractive to the urban, traveling set. Three-day weekend coming up? You can get all the episodes of the soap Kyunki Saas Bhi Kabhi Bahu Thi (Because a Mother-in-law was also once a Daughter-in-law) for a marathon viewing session. Imagine the joys — and the agony.

Just like waiting for IPTV in India.