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The proposed IPTV services were considered as heaven for ISP players, given their ambitious plan to tap the lucrative business. Standalone ISPs have already geared up to launch IPTV services, as they never wanted to be left alone in the race with the mighty mobile operators. The reason for their preparedness is vast.

The size of the global IPTV market is likely to touch $26.3 bn by 2011, from $779.2 mn in 2006, according to market research company iSuppli.

Considering the fact that the anticipated IPTV market boom could also boost the coffers of players, involving value-added offerings, digital music, on-demand gaming, data services, and home security, IPTV has the potential to support the ongoing business of ISPs in India. According to the iSuppli survey, these value-added offerings will boost global IPTV video revenue by over $1 bn by 2010.

The middle class population, who are embracing whatever comes their way, may make India one of the fastest and leading IPTV markets in the global arena. According to a forecast by Alcatel-Lucent, IPTV subscribers may reach 70-100 mn by 2010.

At the end of 2006, IPTV subscriptions totaled 2.2 mn globally, double the number in 2005, says market research company InfoCom. IPTV subscriptions swelled in countries such as France, Spain, and Italy, and many operators are looking at mass deployment.

However, India is yet to catch up with the emerging boom by offering triple and quadruple play services. This comes at a time when the Asia Pacific region is also showing signs of improvement.

Worlds leading economies such as China and India are pitted as the two high-growth markets in the Asia Pacific for IPTV by 2009. China, combined with the already mature IPTV market in Hong Kong, is expected to contribute around 60% of the total Asia Pacific IPTV revenues in 2013.

Countries such as China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan, and Thailand were some of the countries that have shown much interest for early deployments. The service was introduced in India and in the Philippines in 2007. But at present, there are not too many players in India who are ready to put in funds into the IPTV business.

Adding to the Woes
Domestic ISPs are already feeling the heat because of dwindling ARPU. The average revenue per user per month for dialup Internet usage was Rs 200 at the end of September 2007 as compared to Rs 203 at the end of June 2007, a negative growth of 1.48%. A massive uptake in broadband and Internet usage can only improve the present financial situation.

According to TRAIs draft recommendation, telecom service providers (UASL, CMTS) having license to provide triple play services and ISPs with net worth more than Rs 100 crore and having permission from the licensor to provide IPTV, can provide IPTV service under their licenses without requiring any further registration.

DoT can permit any other telecom licensee to provide IPTV services as licensor. Similarly, cable TV operators registered under the Cable Television Network (Regulation) Act, 1995 can provide IPTV services without requiring any further license.

This means ISPs are required to meet the Rs 100 crore net worth criterion and not cable operators. We are extremely disturbed by the net worth benchmark. Only 1-2 ISPs may be able to meet this. Our next step will be to meet concerned authorities in the government since the present recommendations will harm the industry. IPTV could have been a boon for Indias ISPs. But the final recommendations are against our interests, Rajesh Chharia, president, ISPAI, says.

We are extremely disturbed by the net worth benchmark Rajesh Chharia, president, ISPAI	Telecom service providers who want to get into IPTV, will be required to pay a percentage of AGR as license fee Nripendra Misra, chairman, TRAI

According to TRAI, there are seventy-two broadband service providers having a subscriber base of 2.67 mn subscribers. Out of the seventy-two broadband service providers, only thirteen have a base of 10,000 plus subscribers and they share 98.3% of the total subscriber base.

There were 9.63 mn wireline Internet subscribers at the end of September 2007 as compared to 9.22 mn at the end of June 2007, registering a growth of nearly 4.37%. Its poor growth in a year that is considered as the broadband year by the government, and this is not an encouraging sign. If ISPs are unable to offer value-added services such as IPTV, their subscriber base will further tumble in the coming months.

According to Chharia, the association is happy with the rest of the TRAI recommendations.

Unanswered Questions
Will Indian subscribers pick up IPTV services as Indian telecom operators are still wary of offering such services? India is always looking at Chinas growth story. Can the Indian IPTV market be the leading one in the Asia Pacific region, as China is likely to lead the IPTV world in terms of IPTV customer-base, thanks to its growing population and the Chinese governments focus on innovative technologies for this years Olympics?

While China may be leading the subscribers, North America will lead the market in terms of revenue, accounting for over $10 bn in IPTV subscription revenue by 2011, according to iSuppli. Advertising revenue may not skyrocket in India soon, but it has the potential to grow substantially over a period of time.

There is one question that is still unanswered by the industry. Can the net worth issue lead to a series of mergers and acquisitions among the regional ISPs? Combining the businesses may assist regional ISPs to improve their financial positions to a certain extent, though it is not the final answer to the current situation.

The governments recommendations have a far-reaching impact. If telecom operators, including ISPs, are ready to offer quality services at affordable prices, IPTV can be made available across the country.

Baburajan K
maildqindia@cybermedia.co.in

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