Value Added Services A Boon For Cable Operators

Convergence of technologies is shortening the gap between a telco, a cable operator or a DTH operator. These services were distinctly basic and survived on their own for many years, but no more. We have stepped into the age of convergence where every new application is being looked at with interest by every one. What was possible on one kind of service is possible on the other too.

Some times back, cost was a big factor in restricting one technology to a particular platform, but no more. Cost of technology is reducing at logrithmic scale. One chip solutions are being found for multipurpose applications. From the Indian point of view let us examine how these value additions will penetrate and what will facilitate them.

Today, there are five major platforms in India. Cable Television, DTH, Fixed line telecom services, Mobile Telecom and Wireless (WiMax) services. Possible value additions on these platforms are voice telephony, television, internet, data, video-conference. video-on-demand, interactive games etc.

Considering today’s technologies, all value added services are technically possible on all platforms. The differences lies in commercial applications. For example Television on Cable and DTH is the cheapest and best proposition. Where as on Telecom Networks, Mobile, WiMax it is still in the development stage and thus a costly service. Even the infrastructure needs to be adequately developed. Similarly, voice telephony is the cheapest on Internet but more convenient on fixed line networks since we are used to it.

Infact due to a long time use, services have gained a particular character that makes them popular in the masses. Since Internet based services are still in the nascent stage, it will take a lot of time and effort to make them popular. However, IP based services are gaining momentum and becoming popular all over the world.In the long run they will also prove very cost effective as from a single point we will be able to access the world. In such a scenario, regulations are the most important factor to encourage growth. 

Regulatory Support

Our regulators have already taken into account the importance of these value added services and accommodated them into various policies and regulations.

New Telecom Policy 1999

This Policy for the first time recognised Cable Service Providers as the last mile entity. According to this policy- “Under the provisions of the Cable Regulation Act, 1995, Cable Service Providers (CSP) shall continue to be freely permitted to provide ‘last mile’ linkages and switched services within their service areas of operation and operate media services, which are essentially one-way, entertainment related services. Direct interconnectivity between CSPs and any other type of service provider in their area of operation and sharing of infrastructure with any other type of service provider shall be permitted. In view of convergence, it is highly likely that two-way communication (including voice, data and information services) through cable network would emerge in a significant way in future. In that case, they would also be required to obtain FSP licence and be bound by the licence conditions of the FSPs, with a view to ensure level playing field.

BROADBAND POLICY 2004

This Policy also took note of the growing Cable TV market and possibility of using their infrastructure for future services. According to this Policy-

“It is noted that cable TV connection as last mile infrastructure reaches more people than even the telephone copper infrastructure and can be leveraged in providing cable operators a new business model while giving a stimulus to Broadband penetration. Therefore, Cable TV network can be used as franchisee network of the service provider for provisioning Broadband services. However, all responsibilities for ensuring compliance of terms & conditions of the licence shall vest with the Licensee. The terms of franchise agreement between Licensee and his franchisee shall be settled mutually by negotiation between the two parties involved”.

Even now, TRAI is seriously looking at using the cable television infrastructure for Telecom services. It is worth noting that all the Telecom companies are much short of their target as far as broadband penetration in the country is concerned. Their basic drawback lies in their dependence on fixed-line telephone networks and the DSL connectivity. Ironically, MTNL and BSNL, India’s largest Telcos, claim that only 25 per cent of their last mile connectivity can be utilised for broadband. Mobile phones are the next bet for carrying broadband, still the bandwidth constraint is there and service is costly. WiMax, the wireless broadband service is still in the development stage and not popular anywhere in the world. Also, the spectrum availability is a big constraint. Fiber to the Home (FTTH) is again only in the planning stage with Telcos like Reliance and Bharti. They have not even realised their dreams of Fiber to the Node (FTTN). 

Considering the above, 65 million last mile connections of the cable service providers on coaxial cables are a good proposition to increase the broadband penetration in the country. Particularly in the rural areas, where the Telcos hesitate to enter, the cable operators have laid miles and miles of fiber optic to join hundreds of villages, giving video services. If only the government and the private sector decides to help them upgrade for all value added services like Connect (HFCL) is trying in Punjab, cable operators will be more than happy to put in their best to provide all value added services to the masses.

Now, since CAS has already been accepted and addressable systems are being set-up on a digital cable TV network, the next logical step for cable operators to fight the competition from DTH operators and Telcos is to add value added services in their network and increase their revenue source.

Source: http://cablequest.org/articles/regulations/item/1393-value-added-services-a-boon-for-cable-operators.htmlSource: http://cablequest.org/articles/regulations/item/1393-value-added-services-a-boon-for-cable-operators.html