Consumers’ reluctance to change coupled with market competition is making it tough for IPTV to capture the Indian imagination
Even after 6 months of using the much-hyped Internet Protocol Television (IPTV) service, Abhishek Verma, a 32-year old software engineer, isn’t too kicked about it. He has no qualms about admitting to the teething troubles he had to endure when he started with IPTV, where television channels and interactive services are delivered via high speed internet.
But he quickly adds that IPTV is not to be written off. Then there are consumers like 29-year old homemaker Neeta Shukla who are clearly unimpressed with the technology. “The installation took forever and now at times, I find it very difficult to use.” As they say about the Indian consumer, the resistance to change is pretty high — a bullet that’s getting harder to bite for most IPTV service providers.
The oldest IPTV player, Aksh Optifibre, along with BSNL and MTNL, provides IPTV services in about 22 cities in North India, including New Delhi, and is not oblivious to the customer’s apathy. Namrata Sengupta, deputy general manager, Aksh, in fact acknowledges the presence of consumers like Shukla, who are a big challenge for any service provider. She says, “People assume it’s too complicated and as soon as you say internet protocol, half of them get put off.” After 8 gruelling months of ground-level marketing, Aksh claims to have pocketed more than 30,000 subscribers in, and Sengupta insists that subscribers are only growing. Yet, the firm has posted losses of Rs 67.32 million for its services segment, comprising of IPTV and VoIP services to Indian consumers.
A similar subscriber base is being put together in southern India by ACT Interactive TV, another IPTV service provider. But its Managing Director, Sunder Raju, is more than optimistic about IPTV services. Ask him whether IPTV providers have been too slow to come off the blocks, in terms of advertising, promotion and marketing and he gives a calculated reply, “You will see a lot of activity in this space in the next few months.”
He could be right. Larger media houses like Airtel and Reliance have entered the digital TV market, making it a crowded place. For instance Airtel’s Triple Play Service provides subscribers within New Delhi and NCR region services like telephony, internet and entertainment services and plans to take its offering country-wide soon.
“TV consumers who are migrating to new hardware are the ideal targets for IPTV-based services. These consumers will see a level of convenience and personalisation in IPTV that cannot be delivered otherwise. For operators that provide a good quality of experience, IPTV will bring customer loyalty — crucial at a time of increasing churn — by offering a more enjoyable and interactive user experience, feels Kapil Dev Kumar, chief operating officer of MyWay, the latest entrant in the IPTV market. The company has an ambitious target of reaching three million customers by 2012.
Sengupta is positive that it’s just a matter of time for IPTV to take off. “Right now, perhaps there are too many bottlenecks,” she admits honestly. And the bottlenecks start at broadband cables. Like in case of ACT or Aksh, subscribers need a BSNL or MTNL connection in place, in order to use the service. Thus laying down cables can sometime take a lot of time. But ACT’s head honcho, Raju is confident that these are temporary problems.
For now, to take their subscriber number from a few thousands to lakhs, IPTV service providers are offering everything that DTH players have and at competitive price points. Airtel’s offer packs in broadband and IPTV services at just Rs 599 per month. A 117 channel bouquet along with 256 kbps broadband speed (download limit of 2.5 GB) completes this combo package.
According to K Srinivas, joint president (Telemedia Services), Bharti Airtel, the company is positioning its service as a niche offering targeted at specific customers and markets. He explains, “Our strategy is to go slow and then target the other top 5 cities in the country — Bangalore, Chennai, Hyderabad, Kolkata and Mumbai — in a phased manner by the end of this calendar year.”
Aksh subscribers can view on-demand movies at as low as Rs 10. They could even shop, order pizzas, play games on their TV sets. Compared to DTH, the providers are keeping their subscription and installation costs very affordable. For instance, Aksh offers to install its services at just Rs 999 (refundable) and at Rs 199 per month, and users get to view 126 channels. MyWay is promising interactive services at tariffs at par with those of DTH operators and also plans to introduce value-added services like train reservations, online banking, maps, SMS and karaoke along with reminder services, all from the comfort of your television set at home.
IPTV might have evolved from a fringe technology adopted by a few to an alternative digital pay-TV platform. However, what remains to be seen is if it could emerge as an equitable competitor to the DTH medium? Let’s wait and watch.
