IPTV providers bullish on turnaround expectations, despite consumer thumbs down

Though Internet Protocol Television (IPTV) debuted in India in 2008, but the service seems to largely failed to enthuse consumers thanks to a number of factors including the teething troubles. However, analysts say it may be early days yet to write off IPTV, the interactive services platform that includes television channels, offered to consumers over high speed internet.

According to analysts the prime reason of the failure of services may be the hype overkill that might have raised consumer expectations beyond the services capacity to deliver. They point out consumers are clearly miffed over the time it took to install the service; and complaints of difficulty in using the service are not uncommon.

They say that the service providers also failed to factor a basic hometruth - the Indian consumer's resistance to change, which the providers seem to have a difficult time reconciling to.

But according to service providers, who offer IPTV services across North India the problem lies in consumer perceptions as they more often get put off by the tech terminology rather than any underlying complexity that they consumer cannot handle. Companies that have successfully addressed the issue through ground-level marketing report having signed up tens of thousands of customers and a subscriber list that is growing.

However, that seems to have done little to improve the bottom line of providers, analysts point out.

Service providers in the south seem to be even more bullish on IPTV prospects in the near future. They expect the IPTV space to hot up in the next few months and are fully gearing for it.

If the recent moves of companies like Airtel and Reliance are anything to go by, there may indeed be enough reason to watch the space over the next few months. Both Reliance and Airtel have entered the digital TV market with services, such as Airtel's Triple Play Service that offers subscribers in New Delhi and NCR region, services like telephony, internet and entertainment services. Airtel has plans to take the offerings to a country wide audience soon.

According to a recent IPTV market entrant, TV consumers who are migrating to a new hardware are ideal targets for IPTV-based services. The hardware will facilitate a level of convenience and customisation that cannot be delivered otherwise. They point out that provision of good quality experience, by way of enjoyable and interactive user experience will boost customer loyalty at a time of increasing churn. The company is targeting beaming services to three million customers by 2012.

IPTV providers are meanwhile keen to be a step ahead of DTH players as they seek to boost their subscriber numbers from a few thousands to lakhs.

For now, to take their subscriber number from a few thousands to lakhs, IPTV service providers are offering everything that (Direct to Home) DTH players have and at competitive price points. For instance one provider charges Rs999 (refundable) for installation and with subscription charges of Rs199 per month users get access to 126 channels. Another offers interactive services at tariffs on par with those of DTH operators and also plans to introduce value-added services like booking train reservations, online banking, maps, SMS etc.

Analysts point out that IPTV services have morphed from a fringe technology adopted by a few to an alternative digital pay-TV platform but whether it would emerge as a worthy competitor to DTH medium remains to be seen.

Meanwhile, state-owned telecom players Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have worked out a franchise arrangement with a Delhi-based company that could potentially pose a formidable challenge to DTH service providers.

The initiative will see the roll out of the country's largest IPTV service and if the aggressive ad campaign is any indication the start up seems to be in no mood to pull punches as it boldly calls for DTH to be retired. So will it be curtains for DTH? For the moment that seems to be an open question.