Battle for eyeballs

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: and the value proposition. Breaking the price barrier currently set by cable TV will be the allied challenge.

The current recommendations allow cable TV operators to provide IPTV services with no further licensing; though the FDI cap for cable operators stands at 49% versus 74% for telcos.

While cable operators are not subjected to any revenue share, ISPs are subject to a 6% revenue share, while telecos’ revenue share ranges from 6-10%. Thus, a similar service from the end-user perspective is likely to be delivered with varying cost structures and operating structures.

The expectation is that, until the time the regulations converge, the three different categories of service providers will structure their offerings through varied bundles and resultantly differing business models.

Given the segmented customer market place from demographics, awareness and affordability, it is also likely that differentiated offerings are proposed for the different clusters.

The opportunity in the market place, and possibility in the future of cable carrying voice not ruled out, does create an interesting scenario of further consolidation in the cable industry and large foreign players entering, albeit as minority stakeholders, to help an existing cable player to move up the value chain to IPTV.

This will of course significantly raise the already heated competition scenario, and also raise the bar in customer offerings.

Given the somewhat differentiated regulatory framework and operating structures, it is likely that a range of operating models including loose alliance, partnerships and complete outsourcing for content and possibly carriage emerges.

Just as the killer application for telephony in India is still seen as voice, it is likely that the most viable IPTV strategy may well be a hybrid approach—delivery of vanilla broadcast TV over cable or satellite and using the IPTV medium as the platform for higher priced premium on demand and interactive content, at least in the near to medium term.

It is to be seen how soon the market forces drive convergence in the regulatory scenario, and how well the regulations keep pace with technology-driven and customer and innovation-led market developments.