State-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) are not generally considered formidable competitors to private sector players. But a new offering franchised to a Delhi-based company could change things — not perhaps in the telecom space but for direct-to-home (DTH) service providers. The challenger: IPTV or internet-protocol TV.
“It’s time for DTH to retire, introducing MyWay IPTV”, runs the bold ad line for the campaign extolling the virtues of the new technology offered by Delhi-based Smart Digivision, the franchisee for the IPTV launch by BSNL, the national service provider, and MTNL, service provider for Delhi and Mumbai.
MyWay will be launched in over 54 cities — the largest IPTV launch in the country — in the next three months.
“We really do not see any competition,” said Jawahar Goel, who heads Zee group’s DTH venture Dish TV. “Some operators offered IPTV but it did not take off because of the poor quality of the pictures. Also, you need to have a broadband connection which adds to the cost and there are so few broadband homes in the country,” he added.
So why should MyWay be different? One, it is being launched country-wide rather than in a few pockets. Two, the state-owned companies have large fixed-line networks — larger than any private telecom competitor — to leverage. Together, both cover 33 million fixed lines in India compared to about 4.5 million lines owned by four private service providers.
Though that’s the potential addressable market, the spread of the service is dependent on the availability of broadband — a high-speed pipe that delivers information packets at 256 kpbs or more.
To start with, Smart Digivision hopes to offer the services to 1.6 million to 1.7 million broadband subscribers of BSNL and MTNL (in 54 cities). Total broadband coverage in the country does not exceed six million.
“We expect to get two to three million customers who will use IPTV in the next three years,” said Surendra Lunia, director, IPTV, in Smart Digivision.
Lunia adds that the 54 cities chosen comprise 80 per cent of the country’s broadband subscriber base. The company will invest over Rs 500 crore to roll out the services.
Under the franchise agreement that Smart Digivision has signed with MTNL and BSNL, the company will have access to the companies’ subscribers as well as to the copper wires reaching their homes (the “last mile” connection in technical parlance). In return, the companies will be paid 10 to 25 per cent of the revenues from the service.
To take on DTH players MyWay has priced its offer competitively. A subscriber has to pay only Rs 2,000 for installation, set-top box and free channel viewing for three months, roughly similar to competing DTH offers.
