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Currently going through the hype cycle that's the norm with every technology or service in the telecom world, IPTV is seen
as a new savior by wireline telcos suffocating from decreasing margins and increasing competition. Besides impacting the telecom industry, IPTV (a way of getting TV transmitted over broadband connections) is also likely to influence the broadcasting and cable TV industry in a major way.

Currently the goal of the services providers is to offer TV content to their subscribers' computers or TV sets with a set-top box. In future, technological advances might take IPTV to mobile phone users as well.

Service providers can better their profits by offering their customers enhanced levels of personalized and interactive entertainment experience. Besides the delivery of hundreds of TV channels on subscribers' PC or TV, a full-fledged IPTV service offering would include services like video on demand, personal video recording, network-personal video recording (which enables digital recording and time-shifted viewing), and an array of personalized and interactive services like gaming. Services providers can either bundle these services or offer each of them separately. They can also bundle these offerings with their voice services.

While full-scale commercialization of full-fledged IPTV services is still a few years away, several telecom operators are already in the game. Some of them who now offer TV over broadband access include Free, Maligne TV and CanalSat DSL in France; FastWeb in Italy; and Imagenio (owned by Telefonica) in Spain. However, 2005 is going to see more and bigger commercial launches by several operators in the US, Europe, and the Asia-Pacific region. In the US, major telcos Verizon and SBC have planned huge investments in IPTV. In the UK too BT, ntl, Homechoice, AOL, Wanadoo, Freeview, and Sky are likely to kick off IPTV services in 2005. In China four operators are likely to launch IPTV service in 2005.

In a recently released study, The Business of IPTV: Global Analysis and Forecasts, TDG Research, a research consultancy dedicated to the digital home and connected consumer, predicted that IPTV will explode into a $17 billion market by 2010 with 20 million subscribers globally. The study says that while telcos and broadband providers are currently leading the drive, IPTV also offers enhanced business opportunities for satellite TV operators and cable operators. According to TDG Research, satellite operators will augment their broadcast offerings with IPTV-based, on-demand services in order to compete with cable TV players. Additionally, digital terrestrial television (DTT) adoption will also benefit greatly from IPTV-based premium offerings. For cable operators, IPTV technologies will play a determining role in the advent of cheaper set-top boxes, network equipment, and multiplexing devices TDG Research says.

However, like other technologies and services, IPTV too is likely to face a number of initial hurdles. A major hiccup for service providers could be the issue of pricing. Initial per user deployments could prove costly forcing service providers to subsidize deployments in homes. Also, a service provider's success with IPTV would also depend of the kind of bundling it is able to do with the new array of services that IPTV would bring. Also, in countries like India, telcos would face resistance from TV broadcasters who would not like to share content with the operators. More than that, service providers offering IPTV services would have to better their offering from established cable or satellite TV providers. Unless that is done, service providers are unlikely to succeed.

Given the huge base of television homes in India and the Indian consumers' willingness to spend on entertainment, IPTV offers an opportunity to Indian broadband operators as well. By deploying IPTV, service providers can reach many more homes with their service than they could with plain broadband access.

Ravi Shekhar Pandey