Mumbai: The telecom industry's latest move to convert cable TV connections to internet-based IPTV may face challenges such as low fibre connectivity to homes and resistance from cable operators, said industry executives and experts.
IPTV, or Internet Protocol Television, is a method of delivering television content over the internet, as an alternative to traditional cable or satellite TV.
Direct-to-home players like Bharti Airtel, Tata Play, and internet service providers like Excitel are betting on IPTV as the next big opportunity for converting 120 million cable TV households, many of whom haven’t adopted streaming yet. However, several attempts over the past decade failed to gather momentum.
"Telcos are trying to offer it (IPTV) as an option which is comprehensive for all home needs and affordable. But we have not seen much penetration because of its heavy dependency on strong access network technologies,” said Vinish Bawa, partner and leader telecom at PwC. “It’s imperative to have a robust network to support unicast services while it reaches customers for consumption."
Bawa said he expects IPTV to emerge as a major cause of churn for traditional DTH and cable services in the near future, driven by its advanced features and flexibility.
Prashant Singhal, TMT emerging markets leader at EY Global, highlighted that TV consumption patterns have changed. "We do not need 500 channels anymore. Unless IPTV offers a better viewing experience at a lower price point, customers would not want to switch,” he added.
For cable, the first major hurdle to cross is upgrading coaxial networks to last-mile optical fibre, which will require large capex. This is because streaming requires high-speed reliable fibre connections to households, which have seen dismal penetration levels so far.
As per recent study by EY, fixed broadband subscriptions in India are at a mere 2.85 per 100 persons—nearly a fourth of the global average. There are 40 million households or 13% of the total with broadband connections.
“MSOs (multi-system operators responsible for transmitting cable TV) are losing customers at 3% per month, and these viewers aren’t coming back,” said Vivek Raina, cofounder at Excitel, a Delhi-based home broadband provider, which is targeting 2 million Android-enabled IPTV set-top boxes over the next 18 months.
“The only way to reverse this trend is to offer something better, not by charging more, but by replacing existing cable set-top boxes with IPTV boxes at no cost to the customer,” he said.
Raina added that although this requires investments, there are also opportunities to cut costs while leveraging the existing cable operator base. “We spend Rs1,500-2,000 per broadband sale. With this (conversion to IPTV boxes), we simply give the operator the boxes and ask them to replace the old ones. My sales cost drops to zero.”
Historically, cable TV operators resisted upgrading to internet TV, as their fell sharply to only Rs20-30 per connection from Rs200-250. This is because traditional broadcasters like Sony and Star no longer work directly with MSOs. “For years, we have witnessed local cable operators cut fibre every time telcos tried to get into the business,” said the founder of a Mumbai-based service provider.
For instance, Excitel currently has direct partnerships with OTT platforms like Hotstar and Zee5 and is extending them to traditional broadcasters. “It’s a natural progression and this shift has to happen sooner or later,” Raina said.
IPTV, or Internet Protocol Television, is a method of delivering television content over the internet, as an alternative to traditional cable or satellite TV.
Direct-to-home players like Bharti Airtel, Tata Play, and internet service providers like Excitel are betting on IPTV as the next big opportunity for converting 120 million cable TV households, many of whom haven’t adopted streaming yet. However, several attempts over the past decade failed to gather momentum.
"Telcos are trying to offer it (IPTV) as an option which is comprehensive for all home needs and affordable. But we have not seen much penetration because of its heavy dependency on strong access network technologies,” said Vinish Bawa, partner and leader telecom at PwC. “It’s imperative to have a robust network to support unicast services while it reaches customers for consumption."
Bawa said he expects IPTV to emerge as a major cause of churn for traditional DTH and cable services in the near future, driven by its advanced features and flexibility.
Prashant Singhal, TMT emerging markets leader at EY Global, highlighted that TV consumption patterns have changed. "We do not need 500 channels anymore. Unless IPTV offers a better viewing experience at a lower price point, customers would not want to switch,” he added.
For cable, the first major hurdle to cross is upgrading coaxial networks to last-mile optical fibre, which will require large capex. This is because streaming requires high-speed reliable fibre connections to households, which have seen dismal penetration levels so far.
As per recent study by EY, fixed broadband subscriptions in India are at a mere 2.85 per 100 persons—nearly a fourth of the global average. There are 40 million households or 13% of the total with broadband connections.
“MSOs (multi-system operators responsible for transmitting cable TV) are losing customers at 3% per month, and these viewers aren’t coming back,” said Vivek Raina, cofounder at Excitel, a Delhi-based home broadband provider, which is targeting 2 million Android-enabled IPTV set-top boxes over the next 18 months.
“The only way to reverse this trend is to offer something better, not by charging more, but by replacing existing cable set-top boxes with IPTV boxes at no cost to the customer,” he said.
Raina added that although this requires investments, there are also opportunities to cut costs while leveraging the existing cable operator base. “We spend Rs1,500-2,000 per broadband sale. With this (conversion to IPTV boxes), we simply give the operator the boxes and ask them to replace the old ones. My sales cost drops to zero.”
Historically, cable TV operators resisted upgrading to internet TV, as their fell sharply to only Rs20-30 per connection from Rs200-250. This is because traditional broadcasters like Sony and Star no longer work directly with MSOs. “For years, we have witnessed local cable operators cut fibre every time telcos tried to get into the business,” said the founder of a Mumbai-based service provider.
For instance, Excitel currently has direct partnerships with OTT platforms like Hotstar and Zee5 and is extending them to traditional broadcasters. “It’s a natural progression and this shift has to happen sooner or later,” Raina said.
You may also like
14 killed as massive blaze turns Kolkata hotel into gas chamber
Death toll rises to 39 in sectarian clashes near Damascus as ceasefire falters
"This is the victory of crores of people of India": Jairam Ramesh on Centre announcing caste census
Saudi, Qatar urge India, Pakistan to defuse tensions after Pahalgam attack
British woman found beaten to death in French village with 'five deep wounds'
