|TV: A New Lease on Life for Wireline Access
|Country Manager and Director South Asia Operations
Telcos in India traditionally depended upon voice revenues, but competition eroded this revenue base. The incumbent’s systems are largely IP based. It would be relatively easy and cost-effective to offer their subscribers TV over IP service and recuperate earnings. TV over IP allows subscribers to watch films or programs at home whenever it is convenient. Advertisers can use this service to target individual consumers and the two-way data stream permits subscribers to buy products, order demonstrations or request more information.”
“Don’t you wish there were a knob on the TV to turn up the intelligence? There’s one that is marked ‘Brightness,’ but it doesn’t work. How many times have you missed your favorite program because you were traveling, working late or sleeping? Do you feel trapped by the broadcast schedule of your TV broadcaster? How many times do you get to see the latest movie in the comfort of your living room? Don’t you wish your TV could be more intelligent? What if you were not constrained by the TV broadcast schedules? What if you would watch any TV program at any time you wanted to? What if you could watch the latest movies in your living room? … Would you see more TV? Would the operator be able to make more money? Would the broadcaster and movie company support the initiative? Wireline operators have traditionally built their business cases on voice, but as voice tariffs attain new nadirs every month, they need to look at non-voice services to increase their ARPU (Average Revenue Per User). The advent of broadband helped a bit. We are saying “a bit” because broadband will not be the solution for the operator’s woes. We believe it is the services, which are really going to bring money to their coffers. Operator should look at broadband as a commodity and focus on enhancing the “”pipe”” with new services. Broadcast TV and video, are the kings of entertainment market and constitute the biggest advertising market. It is an appealing avenue for wireline operators to look into. Internet has started the trend of free service be it email, web hosting or video streaming, but company after company has realized that these models are frequently only sustainable in long term. Nonetheless, it has changed the consumer mindset; it will take time for consumers to start paying for data services. TV, on the other hand, is a service people are used to paying for and will continue to pay for their entertainment value. In addition more people will be willing to pay a premium to watch the next Harry Porter movie on the day of its worldwide release. TV over IP (Internet Protocol) is a solution, which is appealing to viewer and operator alike. It provides the subscriber with an enhanced viewing experience; it provides the operators with an additional, stable, revenue stream. TV and video streaming over broadband networks promises to revolutionize the viewing experience. Besides the traditional Broadcast TV, IP enables sophisticated services such as TV on demand, video on demand, interactive TV, targeted advertising and pay -per-view. Subscribers are freed from rigid broadcast schedules and from the need to leave home to rent a movie. A subscriber can watch any movie or TV program, at any time that is convenient, in the comfort of his living rooms. IP allows individual subscriber streams to be controlled and monitored, preventing content piracy. This gives free and pay-TV broadcaster, and the movie industry, confidence they can make money out of such ventures. This sort of data stream can be targeted by advertisers to specific audiences. The two-way broadband data stream can enable subscribers to purchase a product, order a demonstration or request more information while viewing an ad. This makes TV and video over IP a powerful direct marketing tool and a very attractive feature for operators to sell to advertisers. . Technology A typical TV/Video over IP streaming solution needs to stream about 100 TV channels and be scalable to meet the demands of millions of subscribers. The infrastructure consists of 4 elements: content creators, streaming servers, media controller and set-top box. A DSL or Ethernet based access network is used to deliver the service. * The live TV content and the static video content are fed to the network through the content creator. * The digital content from content creator is stored on streaming servers. Streaming servers are capable of storing a large reservoir of movies, typically TV contents for last 7 days and older contents, which are still popular with subscribers. Streaming servers interacts with the subscriber to execute their on-demand request and for trick play requests like fast-forward, rewind etc. Streaming servers and content creator take instructions from a media controller. * The media controller supervises and controls the operation of all the components in real time. It accepts subscribers request for streaming and trick-play. * The media controller is also responsible for authentication, authorization and accounting of the set-top box (STB) and services used by the subscriber. * The set-top box is the subscriber end device; it receives the content stream and decodes it for display on a television set. The STB also provide a real time electronic programming guide (EPG), which is used to tune and order the TV/Video program. The service providers use systems for billing, subscriber provisioning, subscriber self care, media asset management (MAM) and digital right management (DRM) to administer the service. So is the “brightness button” finally working the way you wanted it to work? You can finally control the content you want to watch. TV/Video over IP: Case for India The following case study for TV/Video over IP is set in India, however it could be true for many countries with similar characteristics. Wireline operators in India never had it so bad. Growth in the subscriber base or ARPU (average revenue per user) for the wireline industry has been sluggish compared to the wireless industry. With the tremendous growth in wireless, voice revenues have shifted. In addition, broadband has really not yet taken off, primarily because on lack of local content and the prohibitively high cost of the international bandwidth. Thus, wherever operators have deployed DSL-based broadband infrastructures, the speeds being offered to subscribers are in the 64 Kbps to 256 Kbps range. In the past, long distance tariffs were used to subsidize, to reduce local call charges. During the last years, with the number of players in national long distance sector rising from 1 to 3, and with pressure from wireless operators, long distance call tariffs have dropped by more than 60%. The proposal of the regulator and the state owned operator to increase charges for local calls met with stiff political opposition. So for wireline operators, TV and Video delivery adds a new revenue stream that can play an important role in their long-term strategy to generate higher ARPU. Presently cable TV dominates the Indian TV market. Some big Multicable System Operators (MSO) deliver signals to approximately 150,000 small Local Cable Operators (LCO). The cable TV market lacks proper regulation and, consequently, is not trusted by the subscriber. Telecommunication service providers, though, command trust and respect from subscribers. Although the government permits DTH (direct to home satellite TV), only a few operators have come forward and taken the license and none yet have started the service. An average telephone bill in India is about 10 to 15 dollars per month and it costs an additional 5 to 10 dollars for the data services. An average cable TV bill is about 5 dollars. With the enhanced service delivery capability of IP, Telcos can attract this additional 5 to 10 dollars per subscriber by delivering TV and Video over their broadband networks. Listed below are several reasons why investment in TV/Video over IP should be made sooner rather than later: 1. Operators have started to deploy DSL infrastructure, but the high cost of international bandwidth slowed its growth. Local content is a necessity to realize the full potential of DSL. TV provides readily available local content that can increase the use of DSL. 2. The Government of India recently introduced a bill that obliges cable operators to deploy conditional access systems (CAS), so viewers will have to install CAS Set-Top-Boxes. If however, TV over IP set top boxes is offered at competitive prices as the CAS boxes, customers will buy them. 3. India has few, if any, legacy ATM or FR networks. The telecom operators’ core infrastructure is IP based, so they are well positioned to expand their access networks using IP based DSL (digital subscriber lines). This will give subscribers enough bandwidth to receive broadcast TV services. 4. Subscribers trust telecommunication service providers more than local cable operators. 5. DTH is in its infancy; no operators have yet rolled out the service. The entry fee for a DTH license is 2 million US dollars; Telcos offering IP based services do not have to pay this fee. 6. The video rental market is dominated by pirated video CDs, DVDs and videotapes, of questionable quality, that cost about a dollar a day to rent. Movie companies would do well to associate with large operators, Telcos and the like, who can help distribute their movies and would be willing to share the revenues. 7. The Government of India is committed to provide a telephone in every village in the country. Most of these villages have only very primitive media entertainment available and no cable TV access. The same cable, which will be used to provide telephone services, can also provide broadcast TV services and could be used as well for educational purposes social programs, medical support services and the like.