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IDOS 2015: The Broadband Drive

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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.

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