Reliance may start IPTV services by Year End

Reliance Communications, part of Anil Ambani's ADA Enterprises (ADAE) has kick-start plans to roll out Internet Protocol Television (IPTV) services in India by the end of this year. The company is already running trials in 20,000 homes on the TV platform and is in talks with set-top box manufacturers, sources indicated.

Very recently, Microsoft also announced its intention of picking up a strategic equity stake in RCoVL, considering the immense potential that the IPTV business has. Reliance Infocomm has been working with Microsoft since 2003.

RCoVL has laid down 80,000 km of fibre optic network for IPTV services and according to sources the company intends to spend Rs 1,500 crore annually to expand the network. The company is initially in tending to target 200 cities and aims to reach five million IPTV customers.

RCoVL officials, however, were unavailable for comment. On the content front for the IPTV service, ADAE has adopted a strategy of bringing production in-house. The company picked up a 51 per cent stake in Adlabs, a film production and distribution company, last year.

Apart from this, Reliance Capital and Adlabs Films together hold 21 per cent in Prime Focus, a TV and video production facilities company. These acquisitions will give RCoVL more control over the supply of video for the service and also enough content. Reliance Communications was formed last year after the business empire was split between the two brothers Mukesh and Anil Ambani.

IPTV is currently provided by major telcos around the world. Both BT and Deutche Telecom are expected to roll out an on-demand service in 2006. The service is delivered via broadband to your TV (not your PC) via a set-top box at home. It is provided in conjunction with video on demand and may also include internet services such as surfing and VoIP, which would enable to make voice calls. Telcos, both worldwide as well as in India, are looking at IPTV as another revenue generator.

According to a study done by ABI Research, the total subscribers for IPTV may exceed 120 million by 2010 with the Asia Pacific constituting roughly 47 per cent of the total subscribers worldwide. China and India are seen as major markets. The ability to pipe TV content over broadband has the potential to turn the broadcasting, film, advertising, telecom and cable industries upside down as it's an extremely disruptive technology.