No other industry touches as many
technology-related business sectors as telecommunications. Telecom is also
deeply intertwined with entertainment of all types, including cable TV systems,
since cable companies are now aggressively offering local exchange service and
high-speed Internet access. The relationship between the telecom and cable sectors
has become even more complex as telcos are now selling TV via IP (Internet
protocol) services, competing directly against cable.
With the hypercompetitive Indian telecom
market the only aim is growth in number of new subscribers, less churn & increase
in ARPU. The mandatory digitization of the Cable TV sector has opened avenues
for the establishment of an ‘All Digital
Ecosystem’ and has led us to the era of ‘Convergence’.
Technological
convergence will affect not only technological developments and solutions but
it will move beyond its technological nature towards markets, industries and
corporations. It will shift and/or remove barriers between markets and
industries. This will result in an increasing trend of mergers and acquisitions
among corporations within the telecom & media related industries.
Several
major factors are creating changes in the telecommunications sector today,
including:
1. A
shift in business and commercial telephones to VOIP (Voice over Internet
Protocol) services, that is, telephone via the Internet.
2.
A
shift in residential and personal telephone use from wired services to wireless.
3.
Intense
competition between cable and wired services providers.
4.
Steady
increases in Internet usage for communications of all types.
5.
The
continuing evolution of advanced wireless technologies.
Through the convergence
of telecommunications, media & entertainment and IT, the way in which
consumers experience (home) entertainment will change from 'push' to 'pull' or
from 'availability based' to 'on demand'. People will be able to access the
content (digital text, audio, video,) where and whenever they want it. Smart, (in-home)
applications will propose relevant content in real-time to users based on their
activities and preferences.
Telecom Industry in India
The Indian
mobile industry has
been successful in providing affordable telecom services,
thereby empowering the common man and has also driven wider economic growth
across the country
and contributed to government finances.
India has the world's
second-largest mobile phone users with over 929.37 million as of May 2012. It
has the world's fourth-largest Internet users with over 121 million as of
December 2011.
India has come to be
regarded as the world's most competitive and one of the fastest growing telecom
markets.
Cable TV
Industry in India
Indian TV Distribution industry, world’s second largest with 105 million
cable & satellite (C&S) homes, is set for a makeover as the
long-awaited ‘digitization’ becomes a reality. As of 2009, there are 22 million
digital homes with 18 million of these on the DTH platform.
Cable players are now equipped to utilize and operate
set-top-boxes (STBs) and would look to lock-in customers, given the threat from
DTH.
The total digital homes tally is set to rise by
4x to 86 million by 2015E, and address the biggest concern of ‘under-reporting’
in its wake. In the backdrop, the expectation is of a 6.5x increase in the
organized pie to Rs.340 billion even on a modest 14.5% CAGR in industry
revenues to Rs.480 billion by 2015.
India’s digital C&S base is set to expand to 86m by 2015E with 48 million
DTH (18 million as of 2009) and 38 million digital cable (4 million) homes.
Digitization is no longer a ‘choice’ for cable operators and assumes a sense of
urgency in the face of increasing threat from DTH
Also Indian C&S market paralysed by
rampant under-declaration and poor yields. While cable industry did not deliver
on digitization expectations in the past three years, DTH garnered 18 million subscribers (subs) as of 2009.
SHRIKKANTH GOPALAN
CLASS OF 2013
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