The impact of 3G and the viability of services such as mobile TV, IPTV and DTH were discussed at length among key telecom operators at the conference.We bring you excerpts from the keynote address by S.P. Shukla and the panel discussion that followed...

S.P. Shukla
President, Personal Business, Reliance Communications
Mobile TV is essentially a value-added service (VAS). Its uptake will be determined largely by the availability of content visà-vis the perceived value to the customer.

The business case for mobile TV is driven by four key factors: direct broadcast to many from one (like any normal TV channel), the delivery of content at scheduled times, video-on-demand, and the interactive play of customers with content.Operators should focus on content and not the technology platform, as the best technology can fail if the interface between the customer and that technology is not available.

Reliance was one of the first companies to introduce video clips in India. But although video clips were available as early as in 2003, it took a long time for penetration of mobile TV content because of the lack of availability of devices.

As they get ready to launch 3G services and mobile TV, telecom operators are grappling with key strategic issues including service rollout, the kind and pricing of content, and the revenue model. The operating decisions include how to sell and distribute the service.

Rajat Mukarji
Chief Corporate Affairs Officer, Idea Cellular
3G is the third generation in a progression of technologies. It permits larger bandwidth usage and moves from a fundamentally narrowband voice application to supporting and permitting larger levels of nonvoice applications while being far more efficient in its fundamental capability of permitting voice applications. The larger bandwidth automatically allows use of larger bandwidth applications more effectively. The first application that comes to mind is video.

Over the past five to seven years, the technology levels have been fairly substantial and today, as a result of compression techniques, bandwidth requirements for streaming a quantity of video has reduced substantially, thereby enabling sharing of photographs and videos via the internet with people across the world.

A natural extension of this phenomenon is to permit sharing on the handset. When mobile telephony came in with the good old Motorola 3200, now referred to as brick, there was a paradigm shift in both the terminal device and the capability of spectrum use or reuse. But fundamentally, the mobile telephone has always had the ability to provide its user the means to receive a call, no matter where. Extending this to the realm of 3G, TV is a natural capability.There will be a complete shift in the concept of TV as it makes the transition from a family occasion to a personal one, leading to generation of content specific to consumers as individuals. We recognise that there will be a change, but how all this will be impacted and in what way the value chain is going to develop remains to be seen. Today, by and large, at $8 a month, it is possible to get a bouquet of about 200 channels. Whether this can be replicated at the same price point for TV on the mobile is a question that needs to be answered. In addition, some of the other questions that will arise are, how will the entire value chain get monetised and will there be advertising on it.

Sanjeev Chachondia
CEO, BPL Mobile
India has about 120 million homes with TVs. If we assume that the Indian household comprises about 5 individuals on an average, we are talking about 600 million individuals who watch TV. On the mobility front, we have crossed 300 million subscribers and are looking at 600 million subscribers. Clearly, there is this universe of about 600 million-plus that can get TV on their mobiles. Given that the penetration is abysmally low, there is clearly a huge untapped market that can be captured by telecom operators.

BPL Mobile launched mobile TV services about a year ago and discovered that customisation of content to make that experience more relevant for the user is critical.Moreover, compression and coding techniques will have to evolve to ensure that the experience is continuous. While 55-60 per cent of the handsets support video clip streaming, a lot of work still remains to be done. The mobile provides an opportunity for micro segmentation, which opens up the advertising-based model where the focus is on individuals with different demands. So, despite the disadvantage of a smaller screen, the advantages of micro segmentation will be possible only in the case of mobile TV. Mobile operators can also offer location-based services. Targeted "As operators get ready to launch 3G services, the key strategic issues are service rollout, the pricing of content, and the revenue model." "Today, at $8 a month, it is possible to get a bouquet of 200 channels. Whether this can be replicated at the same price for mobile TV is the question." "There is a very big market for IPTV, DTH and mobile TV in India. The volumes are so large that even a small percentage can bring in huge revenues." advertising and offerings like locationbased services are a great opportunity to subsidise the content which would otherwise be a very difficult proposition given that average revenue per user (ARPU) is less than $5. There is a need to create a model that is different from a transaction or a subscription-based model and is more towards an advertising-based model. There is a very big market for all these services –­ IPTV, DTH and mobile TV. The volumes are so large in the Indian market that even a very small percentage makes a very huge difference to our revenues and profitability.

So, the market is there, the technologies are there and evolving further; the challenge is to determine the cost to serve.For instance, in the mobile business case, most of the profitability comes from voice and SMS, which are user-generated content. On the other hand, by offering channels for mobile TV, the revenue has to be shared with the content provider. There are also regulatory costs (spectrum charges, licence fees, etc.) which need to be taken into consideration. As a result, the profitability of the telco starts coming down.Therefore, today, the business case does not stack up. The real challenge here is to determine the price point on which the cost to serve is recovered. Moreover, with just 5 MHz of spectrum, it will be difficult to make mobile TV a scalable model since most of the spectrum is likely to be used for decongesting the existing 2G networks.

Neerav Khambatti
General Manager, Tata Sons
Clearly, TV is a very promising value-added service for mass adoption. TV as a service has proven its viability, given the number of TV households in the country. The Indian consumer's willingness to pay for TV has also been established. The technologies, be it on the network side or on the device side, are making fairly rapid progress and lesser bandwidth is required today for delivering the same experience. Consumers have also clearly established their preference for bundled services. For instance, more than 50 per cent of the communication services sold in the US last year were in the form of bundled services, with as much as 80 per cent in the form of dualplay bundles and 50 per cent in the form of triple-play bundles. At the end of 2007, the global revenue from mobile TV or video services was about $4 billion vis-àvis the global revenue from digital TV services, either DTH or through set-top boxes, and mobile messaging, which was about $90 billion and $70 billion respectively. So, in real terms, these businesses are relatively small in size as of now.

The key question that telecom operators are grappling with is the return on investment implication of using unicast networks, which is relevant for a spectrum-starved country like India. Given that voice is, by far, the most profitable service from an operator's perspective and video is the least profitable, operators need to take a call on whether 5 MHz is best utilised for TV-like services or for decongesting networks and using that spectrum for voice services. Likewise, in the case of IPTV, most of the proponents of IPTV have been operators who have had historically large wireline networks except for PCCW in Hong Kong, which is actually a cable operator that offers telecom services. For these operators, the key consideration is the additional services they can offer on the existing network. In India, while there are about 310 million mobile connections, the number of wireline subscribers is shrinking. The capex for a greenfield wireline network is huge and by the time the capex starts getting recovered, wireless technologies have progressed and a wireless alternative has emerged.

So, operators are looking at wireless triple play but with the wireless part of TV being through DTH. Given the context of India, it would be very difficult to think of a single pipe that would offer all the services to the end-user. Operators will offer bundled services, but through different networks. So, real convergence would happen at the customer premises either in the form of a device or in the form of a bill, but not in the form of a single network. I think all the solutions will coexist; India is a sufficiently large market for absorbing and actually seeing rapid proliferation of a number of these technologies. There will be pockets where solutions like IPTV would be accepted and customers would be willing to pay a premium for such services, but there would be many others who would be happy with the convenience of DTH or even a normal cable, and would want to stay with that.