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GroundPost: Cable TV will become a broadband-focused business
MUMBAI: With video revenues expected to decline in future, broadband is indeed the next big revenue driver for cable TV service providers. There are only one million cable broadband subscribers out of an estimated 120 million cable TV homes, which means that opportunities are galore as far as broadband is concerned.
Broadband over cable provides huge opportunity to cable TV service providers and helps to reduce their dependence on the video revenue that has to be shared between broadcasters, multi-system operators (MSOs) and local cable operators (LCOs).
These were some of the points discussed in a session titled ‘Prospects of cable TV broadband in Madhya Pradesh’ at GroundPost’s digital summit in Indore. Organised by TelevisionPost.com, the event attracted over 300 LCOs besides all the other stakeholders.
Ortel Communications president and CEO Bibhu Prasad Rath was straightforward that content consumption as we know it is set to change on the back of technological innovations, making the case of broadband even more compelling.
“Content consumption over television will lessen, while consumption over new platforms will increase. We don’t know when that will happen, but that is a reality that everyone accepts,” Rath said.
He also insisted that cable is a pipe that can be used for providing various services including broadband. Just as cable is used to deliver content to television, similarly the same pipe is capable of delivering content over broadband.
“Broadband growth will explode in future. Cable TV service providers must be geared up for that. Cable TV business in the long term will become a broadband-focused business,” Rath added.
It is not imperative for cable operators to make big investments in upgrading networks. They can provide broadband services just by making the fibre co-axial network two way. He, however, cautioned that cable operators have to work on the right network design and quality accessories to create a quality broadband network.
Broadband offers better margins than cable TV. “Ortel gets 25 per cent revenue from broadband despite the fact that only 11 per cent of our subscriber base use broadband,” he stated.
The Ortel CEO urged LCOs from Indore to at least make a start in broadband by implementing a pilot project in certain areas, and if it works, take it to the entire city.
Session moderator HSBC telecom and media analyst Rajiv Sharma said that content consumption is becoming platform agnostic.
Broadcom India director of business development Rahul Khosla said that the future of broadband is cable. He also said that the cable TVservice providers must focus on Docsis 3.0. Citing the US example, he said that cable TV operators in the US were finding it difficult to shift to Docsis 3.0 because they are stuck with Docsis 2.0.
With regard to Docsis pricing, he said that the price of Docsis 3.0 technology will soften as the volume goes up. He also said that broadband ARPUs in India are better than those in the US and broadband rates in India are competitive compared to the US rates.
Cisco Systems CTO – India service provider video Manoj Barara said that Docsis technology is as competitive as fibre to home when compared in terms of bandwidth delivery and pricing.
He averred that though GPON was capable of delivering 1 Gbps of speed, people do not consume that much bandwidth. He also cited the example of the US where average bandwidth consumption is 200–250 Kbps, while in cable the actual consumption is 300–350 Kbps.
“If the consumption is only 300 Kbps, why should I burden the customer with 1 Gbps which only adds to the cost?” he affirmed.
Barara highlighted that the cost of GPON depends on quality. The price of GPON product varies from three times to seven times compared to Docsis. The cost varies from the quality of product used, he stated.
Verimatrix sales director, SAARC nations Naveen Kumar pointed out that it is high time cable operators started taking broadband seriously, because if they fail to do so, then other players like over-the-top (OTT) providers may take advantage.
He also said that the choice of technology like GPON, Docsis or FTTP was secondary. The main issue was utilising the existing network to provide broadband services. The operators must also turn their attention to value-added services (VAS), he recommended.
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