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Tag: IDOS 2015

  • IDOS 2015: The Broadband Drive

    IDOS 2015: The Broadband Drive

    GOA: The penultimate session of the Indian Digital Operators Summit (IDOS) 2015 was a panel discussion on ‘The Broadband Drive.’ 

     

    The session was moderated by Indiantelevsion.com founder, CEO and editor-in-chief Anil Wanvari and Media Partners Asia executive director and founder Vivek Couto. The other members of the panel were Maharashtra Cable Operators Foundation (MCOF) president Arvind Prabhoo, Hathway MD & CEO Jagdish Kumar, Ortel Communications Limited head of broadband Servises Jiji John, Lukup Media founder and CEO Kallol Borah and Broadcom India MD, head – business development, India and South-East Asia Rajiv Kapur.

     

    The session began with Jagdish Kumar saying that earlier, Hathway had positioned itself as a cable company that also offered internet, and now it had started positioning itself as one that offered both cable and broadband. Hathaway had doubled its turnover from broadband as compared to last year. However, the company had yet to firm up plans for OTT, said Kumar.

     

    Kumar was of the opinion that the government should take the eight per cent revenue share from data revenue of the cable industry only after higher internet penetration levels took place after two or three years. “This has to be looked upon as an infrastructure development,” he added.

     

    “Average revenue per user (ARPU) is not the driver for broadband to be taken up as a business by MSOs or LMOs. It is margins that actually matter. The reason why MSOs and LMOs have taken up broadband is because there was a requirement,” said John.

     

    In his view, access devices have multiplied over time and with that the consumer wanted to see videos on whatever device, whenever, and wherever. “While mobile internet is the only option when one travels, it is wired broadband that offers the proper stable throughput. Systems such as DOCSIS 3.0 offered a better experience than television did,” John added.

     

    For Ortel, broadband was an important stream and DOCSIS 3 was being tested in a limited way. Ortel garnered subscriber numbers in three digits during the pilot phase revealed John. “We have now started offering video free to broadband customers,” said John.

     

    The company is looking at charging a customer approximately Rs 1000 – 1200 for 10 mbps broadband and Rs 1999 for 50 mbps. “This will subsidise content charges to broadcasters for the free video offerings to subscribers,” he said.

     

    Similarly, Hathway was also considering bundling of HD content free along with broadband, according to Kumar.

     

    India has its own unique business and environmental challenges, which include unpredictable power and last mile cable laying amongst others. However, technology was available to serve India and/or China specific solutions, said Broadcom’s Kapur. “On the subscriber side, PC penetration is low and operators saw the STB only as a live video delivery necessary evil. Some operators would proactively drive broadband, while others would react only,” he said.

     

    Emphasising that if broadband was considered as a ‘use case’ as opposed to a pipe, Kapur said that services delivered to the consumer could be quite game changing. “Broadcom is very bullish about broadband in India. Broadband is the only answer for a cable operator to retain customers as well as raise ARPUs. Progressive minded cable operators will take advantage of the fact that networks could be two way and will establish a service that would retain a customer with a higher ARPU. The higher ARPU customers were in turn needed to subsidise the lower ARPU customers. Rather than government driven, a private sector sustainable business and profitability driven long term sustainable business model is required,” Kapur opined.

     

    The pipe is already in place said MCOF’s Prabhoo. “The question is about how one utilises it. There is enough fibre waiting to be exploited for Phase III of digitisation. MCOF is educating its members about the ways to monetise the pipe. On an experimental basis, MCOF tied up with a PSU, a national ISP that brought the pipe to a particular place, and from there, over the last 20 days, we have connected 25 branches of a nationalised bank with secured leased lines. This would be scaled up to about 125 over the next few days. Over the next three months, this would further be scaled up to 525 branches across the state of Maharashtra,” he informed.

     

    This would help build LMOs confidence that they could deal with a PSU explained Prabhoo.

     

    Also, some MCOF members had established WiFi service hotspots, which had initially offered high speed internet free of charge for the first six months, and now could be availed though a voucher at a small price of Rs 5 for three hours, or Rs 10 per day from small vendors such as a ‘paan shop.’ Prabhoo claimed that through the commissions on voucher sale alone, a paan shop owner’s earnings had gone up by Rs 8000 per month. 

     

    Bullish on the broadband sector in India, Prabhoo said that he envisioned a number of innovations coming into the business.

     

    Explaining his company’s product, Lukup Media’s Borah said that it offered on-demand multiscreen TV service and operates as an OTT platform through a multiscreen home gateway that brought internet delivered content to television and other consumer devices. In the coming months, Lukup also planned to bring linear broadcast TV channels and internet access though a single connection.

     

    Questioning as to why cable companies were not sharing infrastructure in the way telcos were, Wanvari of the opinion that cable companies could compete on products. Kumar agreed that there was merit in cable companies sharing infrastructure for a lot of backend processes and expected this to evolve naturally over a period of time. On the other hand, Prabhoo said that LMOs would be willing to upgrade their infrastructure to work with telcos for providing broadband.

  • TRAI prefers industry-driven guidelines instead of mandating directives: SK Gupta

    TRAI prefers industry-driven guidelines instead of mandating directives: SK Gupta

    GOA: Even as he reiterated that there will be no further extension of date for the third phase of Digital Addressable System (DAS) slated for 31 December, 2015, Telecom Regulatory Authority of India (TRAI) principal advisor  SK Gupta stressed the need of industry-driven guidelines instead of those mandated by the regulators.

     

    Pointing out that many lessons had been learnt from implementation of the first two phases of DAS, Gupta also stressed that the consumer was king and all policy decisions including tariffs had to be made with him in mind.

     

    Addressing the concluding session of the Indian Digital Operators Summit (IDOS) 2015, through teleconferencing from Delhi, Gupta accepted a suggestion for the need of a ‘supra-body’ other than the Task Force to go into these issues and solve problems that arise during implementation. 

     

    IDOS 2015 was organised by Indiantelevision.com and Media Partners Asia from 24 to 26 September in Goa.

     

    Gupta was of the opinion that the consumer’s choice was neglected and he was forced to pay for bundling of channels or bouquets instead of a la carte rates, which may not give him the channels he wants.

     

    At the outset, he said that there the industry had seen a sizeable growth. “The number of cable households have gone up from 79 million in 2006 to over 101 million at present. The number of channels have gone up to over 800,” he said.

     

    However, he added that though the number of channels have grown to over 800 in India, the driver channels totalled to just around 50.

     

    Furthermore, he said that customer still face billing problems and it wasn’t easy for them to switch to another operator. “The stakeholders must jointly resolve these issues. It has to be understood that it will not be easy to get customer to pay more,” he said.

     

    Pointing out that the increase in average revenue per user (ARPU) is illusory, if the system was faulty, Gupta asked stakeholders to reflect on it jointly. However, he was quick to add that this may not be possible, given “the level of infighting within the sector.”

     

    Gupta also urged the broadcasting sector to take a few lessons from the telecom sector, which had also begun with lot of litigations but had then realised that collaboration was the only way to go ahead. “Today they are prepared to share and sell spectrum and have accepted mobile portability. As a result, there has been tremendous growth in the telecom sector,” he said.

     

    Speaking on broadband, Gupta said, “Lowering the price of broadband is do-able if set top boxes could provide both television and broadband. TRAI gave its recommendations in this regard to the Government in January this year. This will herald the start of a new era in broadband growth.”

     

    “Stakeholders need to realise that the concept of television or video watching is moving to mono-viewing,” he said.

     

    While it was for the stakeholders to find ways to get the customer to fill the Common Assessment Framework (CAF) forms, Gupta said that lessons learnt from the first two phases should help. TRAI would “like to see consensus,” he said.

     

    Gupta also said that while TRAI had its offices in many centres of the country, he would urge the Information and Broadcasting Ministry to send proper instructions to nodal officers in the Phase III and Phase IV areas. His remark came following a complaint that most nodal officers in smaller towns were still not clear about their role in DAS.

     

  • Change in investor mindset needed for MSOs to chart growth path

    Change in investor mindset needed for MSOs to chart growth path

    GOA: While the direct-to-home (DTH) sector has managed to attract investment from private investors because of its growth, the cable industry will be able to do so only if multi-system operators (MSOs) add broadband to their services.

     

    This was the general consensus of a session on ‘Investing in Digital assets – Gems and long bets’ at the ongoing Indian Digital Operators Summit (IDOS) 2015 organised by Indiantelevision.com and Media Partners Asia.

     

    HSBC Securities and Capital Markets (India) Pvt Ltd director of analyst telecoms, media and Internet Rajiv Sharma said that DTH had gained as it has shown growth in terms of average revenue per user (ARPU), and innovation.

     

    While the stocks of cable industry initially went down, a reading of the figures of both cable and DTH showed that there was some recovery towards the end of the year. “The MSOs have not matched up to expectations, partly because of MSO-local cable operator problems,” Sharma said.

     

    In the session moderated by Castle Media ED Vynsley Fernandes, Sharma said that broadband can be the catalyst, which can bring in growth but only one or two MSOs have entered the broadband space.

     

    “The scale of growth is directly linked to attracting investments. If LCOs (local cable operators) can show that they own subscribers, they will get investment,” Sharma said. However, he was quick to add that broadband infrastructure and broadband compliant STBs (set top boxes) would help.

     

    Asked about collaborations, Sharma said that the media can learn a lot from telecom where networking and collaborations led to the government thinking in terms of letting them sell or share spectrum. “Telecoms focus on revenues to share, while the cable industry wants finance for set top boxes,” he said.

     

    Replying to a question about the slow growth of broadband in the country, he said, “Anything that is wireline will grow slowly whereas wireless will grow much faster. The consumer is willing to pay but it is for the government to facilitate this.”

     

    Sharma also added that the quality of management, profitability and network will attract investments. He regretted that the cable industry had failed to learn any lessons from the first two phases of the Digital Addressable Systems (DAS).

     

    Concurring with Sharma, MPA executive director Vivek Couto added, “Investors reward growth and DTH did exactly that.” However, he was of the opinion that the last mile operator (LMO) will consolidate under the Headend In The Sky (HITS) platform and that may change the situation. “The results will begin to show in the three to four years,” he said.

     

    Referring to NXT Digital, which was prepared to offer funding, he said that LMOs may now come forward.

     

    Couto added that while organized MSOs were doing well, investment in broadband in the short term would bring in benefits in the long term.

     

    In reply to a question, he said that India was the only country where content generation was growing. “But in all this, the cable industry was feeling lost,” he opined.

     

    Indiantelevision.com founder CEO and editor-in-chief Anil Wanvari had the last word when he said that the mindset of investors had to change as few MSOs in India could today afford the kind of growth their counterparts had shown in foreign countries.

     

    In another session, Maharashtra Cable Operators Foundation president Arvind Prabhoo and Sagar E-Technologies executive director Sudhish Kumar agreed that the cable industry had to organise itself better if it was to attract investments and grow in the digital era.

     

    Prabhoo said he had succeeded to an extent in this by getting the LCOs to be seen as the last mile operator (LMO). In an example of how the LMOs can grow, he said, “30 LMOs in Nagpur have joined together to form an MSME and were not prepared to invest in other LMOs,” he said.

     

    He added that if investors put in money to help create model services, there will be a major change in the next six months or so. “If cable operators offer other services through their STBs, there will be a churn in the industry,” he said.

     

    Kumar, who has a headend in Bangalore, lamented that finance was a major problem. “One STB cost around Rs 1500, but some of the larger MSOs sell boxes for around Rs 1000 and this forced others to sell at lower rates, which in turn results in a loss,” he said.

     

    Emphasising on the fact that MSOs were not concentrating on marketing, he said that if they did, it would help in consolidating the industry.

     

    Citing his own example, he said that he had not lost a single LMO despite having had ups and downs in his company because of the faith reposed in the company.