IPTV Value Proposition - Telecom operator experience

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IPTV Value Proposition - Telecom operator experience

November 15, 2008

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Stealing a march over private telecom operators, public sector sector units, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) launched their IPTV services earlier this year. We bring you industry experience in implementing pay-TV services...

P.K. Shah
Deputy GM, Broadband Services, BSNL

Implementation of IPTV by BSNL
Like everywhere else in the world, the home entertainment space in India offers a plethora of opportunities, exceeding even those offered by telephony and computing.According to a Confederation of Indian Industry-KPMG report, India has over 119 million TV households and is adding over 7-8 million users every year, as compared to 39 million fixed line connections (with less than zero annual additions) and 30 million PCs (with 7 million annual additions).

According to industry estimates, the cable and satellite TV market is expected to penetrate 115 million households by 2013 from the current 68 million, at a compounded annual growth rate (CAGR) of 11 per cent. Internet protocol TV (IPTV) is expected to garner a reasonable share of this market.

Customers and telcos both stand to gain from IPTV. For customers, the value additions offered by IPTV include:

Better quality of service (QoS) in comparison to regular cable TV

A broad array of content

On-demand content.

Telecom operators can avail of the following advantages:

They can deliver voice, video and content through the same platform, thus addressing the customer's need for a one-stop shop.

The customer's requirement to "control his wallet" can be met by cross-bundling content with other services (voice and data), thereby enabling attractive tariffs.

IPTV has the capability to offer the same service over a number of different platforms, including mobiles, computers and TVs.

Looking to tap this potential, Bharat Sanchar Nigam Limited (BSNL) aims to garner more than 4 million IPTV subscribers by 2013. The incumbent launched IPTV services in early 2008 in 25 cities. The services were introduced in 10 more cities in October 2008. By March 31, 2010, the telecom operator hopes to offer IPTV in 200 cities.

The model adopted by BSNL for IPTV delivery is a complex and dynamic system, comprising a variety of elements and players in the value chain. In order to provide these services, BSNL focuses on its core competence.

However, the uptake of IPTV has been slow so far. There are hurdles in the key areas of technology, QoS, network, regulation and content.

With regard to technology, BSNL is faced with the following issues:

The technology itself is young.

The bandwidth-efficient MPEG4 format has been commercially deployed only recently.

Equipment and set-top box (STB) costs are now becoming comparable to the competing digital platforms.

The following issues remain with regard to QoS:

In an IPTV network, services and service delivery are dynamic. Thus, quality assurance is more complex.

Quality in IPTV means quality in the whole delivery chain, which is complex.

The customer expects instant response from the operator.

All components have to be engineered in the best possible manner.

On the network side, the challenges can be on account of the video head-end, the transport layer 3 network, aggregation and last mile access site, and customer premises.

Challenges on the video head-end include the following:

Poor content quality from video provider

Program Clock Reference jitter from the encoder or video-on-demand (VoD)source

Packet Identifier mappings or data table mapping from the video source

Sync issues

Incorrect configuration of bandwidth

Billing-related issues

Middleware problems.

On the transport layer 3 network, the following complications can arise:

Packet loss

Error correction performance/fibre problems

Misprovisioning

Local channel feeding error

QoS policy

Protocol configuration.

With regard to aggregation and last mile (metro Ethernet network) layer 2 network, the issues are:

Copper loop problems.

Loop performance and stability.

Noise and impulse on loop caused by poor jointing.

QoS policy.

Multicast flooding and packet loss.

Internet group management protocol (IGMP) multicast performance.

Error correction and/or channel fill capacity.

Protocol misbehaviour.

Joining failure.

On the regulation side, the concerns are as follows:

The Telecom Regulatory Authority of India has not defined clear-cut guidelines on IPTV.

The regulator has now made the pricing of cable channels similar to that for direct-to-home services, thus creating a level playing field.

IPTV guidelines have recently been announced by the Ministry of Information and Broadcasting, thereby enabling broadcasters to provide signals on a commercial basis.

On the content side, the main hurdle is the reluctance of media houses and content providers to share content.

However, issues and concerns notwithstanding, BSNL has identified several key areas that will facilitate the growth of the technology in the future.These are introduction of Wi-Max and fibre to the home. Along with this, the incumbent's substantial copper backbone will expectedly push the growth of broadband to 5 million per year.

Going forward, BSNL plans to offer services like video surveillance, voice over IP (VOIP), and video and audio conferencing on the IPTV platform. It thus hopes to provide interactive and personalised entertainment and communication to its customers.

B.K. Badola
General Manager, IT, MTNL

MTNL's IPTV perspective
MTNL initially trialled IPTV services in October 2006. It introduced tariff plans for the service only in August 2008.

The operator has identified several key drivers for IPTV in the country:

The incumbent's existing copper and broadband infrastructure is expected to provide a reliable delivery platform.

The deployment of IPTV is expected to increase the average revenue per user and reduce churn.

IPTV offers better QoS, providing a rich and personalised interactive experience and triple-play services (voice/data/video) on the same subscriber line.

MTNL has adopted a franchisee model to deliver IPTV services to its customers. Currently, the operator has two franchisees and the service delivery model is based on revenue sharing, in which revenue from advertising forms a part of the sharable revenue.

The technologies used for delivering IPTV include ADSL2+, VDSL and metro Ethernet. The services that are currently being offered include multicast, VoD, time shift TV, passive optic network (in the pipeline), 3G for mobile (under implementation), and mobile TV (on GPRS).

The experience so far has thrown up the following challenges:

A very high degree of dependence on cable operators for content; provisioning of STBs and services; service restoration and marketing of current and new services.

Content availability and pricing.

The absence of guidelines on the pricing of content.

Poor quality of last mile access.

Using dated infrastructure, such as older IP DSLAM, leads to inefficient usage. For example, only 25 per cent of the DSLAM capacity could be used for IPTV.

Providing IPTV services requires STB control cards.

Nevertheless, the IPTV service provides a strong value proposition for all segments – consumers, content owners and distributors, advertisers and service providers. Going forward, MTNL will provide services such as TV gaming, high definition TV and mobile TV (using the 3G mobile network).

Sal Arora
General Manager, India, Connected TV Business Group, Microsoft Corporation

TV via telcos
The requirements of consumers can, to some degree, be predicted by discussing the benefits of IPTV and observing the paradigm shift in the way customers consume content such as ringtones, callback tones, pictures, and recommendations for consumer goods and services.

A few trends that have emerged in the market show how connected applications such as VOIP or messaging are changing the way people communicate. The personalisation of media on mobiles has facilitated the growth of the mobile industry.

Within all these shifts, however, TV has remained an isolated device. Things are still regimented by TV schedules and the notion of prime time. IPTV, therefore, acts as a bridge between the TV and the consumer. TV becomes connected to diverse content (such as HBO, YouTube, personal media, etc.), diverse devices (laptops, PCs, etc.) as well as diverse networks (VDSL, ADSL, 3G, metro Ethernet, etc.)

The success of IPTV will hinge on the following factors:

Social: Content sharing, collaborative filtering of content, messaging and usergenerated content.

Personal: Rich digital video recorder functionality that permits download and play of content and allows personalised advertising, targeted at a specific audience.

Easy: Ease of navigation, performance and accessibility.

Connected: PC-to-TV sync, sharing of home media, and mobile TV.

Globally, the uptake of IPTV has been considerable. In a 2008 residential TV service satisfaction study, AT&T's U-verse was ranked highest in terms of overall satisfaction, performance and reliability, customer service, cost of service, billing and offerings and promotions. The company was followed by Verizon and DIRECTV. It remains to be seen whether IPTV can replicate its success abroad in India.

All in all, IPTV will cater to the changing requirements of consumers by offering a host of new and innovative services.