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‘We are providing cost-effective STB solutions tailored for the Indian market’
Broadcom India managing director and head of business development South/South East Asia Rajiv Kapur is bullish about the company’s prospects in India as the country’s cable TV networks move from analogue to digital technology.
India, Kapur says, is a strategically important market for the $8.5 billion semiconductor solutions company for wired and wireless communications.
Broadcom, which has a diverse portfolio of products, sees big opportunities in set-top box (STB) and broadband categories. The cable TV digitisation has given fillip to both these segments, asserts Kapur.
Kapur also has a word of caution for the government which is pushing for indigenous STBs for Phases III and IV of digitisation.
While India has established itself with its engineering talent, Kapur says that the STB industry must be allowed time to establish the needed business scale, talent pool and supply chain management to provide world-class electronics made in India.
In a conversation with TelevisionPost.com’s Javed Farooqui, Kapur talks about the opportunities in the Indian market, impact of digitisation and the trends in the STB market.
Q. How important is the Indian market for Broadcom?
We are highly dedicated to the Indian market and emphasise on proposing differentiated and compelling products. India is a large-end market that consumes a lot of electronics. This is important to Broadcom and our customers who build and sell systems based on our silicon.
Q. What opportunities do you see for Broadcom in this market?
Our portfolio for India is diverse. The list is very long, but the big opportunities we see in 2014 are in STB – DTH and cable mostly, with some terrestrial and IPTV, access – GPON opportunity in India is very large. Cable operators are showing higher thinking around Docsis. Although small, ADSL, VDSL and EPON remain as other growth markets. Mobile including 3G smartphones and the upcoming LTE opportunity is large and important.
Q. What is Broadcom’s strategy for the Indian pay TV market?
We focus a lot on bringing integrated single system-on-a-chip (SoC) solutions. We are unparalleled in levels of integration, which allows building higher-performance, lower-cost solutions. Broadcom focuses on entry-level zappers to address the needs of the masses, and this is also done with market-differentiating features that we invent for India.
Then we have a full suite of mid- and high-end products for operators to offer more services. Indian operators are building solutions on our silicon and you will see market launches in the months to come.
As leaders in connectivity, our Wi-Fi is being used to connect STBs. Our broadband access choices are being used to offer broadband and hybrid services to subscribers.
Q. How much revenue does India contribute to Broadcom’s overall revenue? What kind of revenue growth are you expecting this year?
We do not report geographic revenue by country. However, we have called out India several times in corporate earnings calls as one of the reasons for our corporate growth. That is an indicator of India’s importance and impact on Broadcom revenues.
Q. What are your plans for the Indian market for 2014?
We will continue to scale up our market efforts for India. Higher momentum in the broadcast market, with more STB deployments, is definitely a focus. India’s appetite for broadband is now visible, and that brings a variety of opportunities for us across wired and wireless technologies. As you would know, we invest heavily in ADSL, VDSL, GPON, EPON, cable modems, C-Docsis, Ethernet, Wi-Fi, PLC, 3G, TD-LTE, FD-LTE, all of which are relevant to India’s growing need for connectivity. Mobile phones and Ethernet switches continue to have a growing market in India.
We will keep innovating to bring more differentiated solutions for emerging markets like India. We will also keep integrating to bring single-chip solutions, reducing costs and complexity for our customers. We support Indian design and manufacturing, and will continue to do so.
Q. Tell us about your product offerings in broadcast sector for the Indian market?
The product spectrum for Broadcom is very high. Almost all the products make their way into the Indian market. Broadcom offers the broadest portfolio of state-of-the-art system-on-a-chip and embedded software solutions in the STB space. Our extensive range of highly integrated chips provides solutions for the low-, mid- and high-end STBs for the cable as well as the DTH platforms. Broadcom also provides hybrid IP STB, over-the-top (OTT) STB and DVB-T2 solutions. The diversity of our product portfolio caters to consumers across segments and enhances their experience. We already enjoy a good market share in India, particularly in DTH. We are very focused on the growing market with cable digitisation, terrestrial and IPTV opportunities. For example, Broadcom is providing innovative yet cost-effective STB solutions tailored for the India market to help facilitate the country’s ongoing cable digitisation effort.
Broadcom is the leader in all types of wired and wireless communications. Our leadership in numerous technologies allows us to help operators with in-home connectivity using Wi-Fi, power line, MoCA, Bluetooth and connectivity to the home with ADSL, VDSL, GPON, EPON, cable modems, EoC, and metro Ethernet, among other choices.
Q. Between cable and DTH, which segment is growing faster for Broadcom? What is your market share in the cable and DTH segment respectively?
We are not in a position to compare the trend in cable versus DTH for 2014–15. There is a clear opportunity for subscriber acquisition that both DTH and cable operators are pursuing. So far, just a small fraction of the country has been digitised and the majority is yet to be converted (Phases III & IV of DAS). Cable and DTH operators are both gearing up to compete, and it is hard to say who will win. Both bring different value to subscribers. Without worrying about the exact percentage split between DTH and cable, we know that both will be large growth engines for us. We do not share market share numbers externally.
Q. Who are your major clients in the broadcast sector?
We have established a very good position in India’s DTH and cable markets. Majority of Tier 1 DTH and cable MSOs have used products built on our silicon solutions. We do not explicitly name the operators publicly. There are some formal press releases which represent some of these Tier 1 MSOs—IMCL, Hathway, Tata Sky, Dish TV, Bharti.
|‘We have a very large office in India, the largest outside US. We are ready to support the rising electronics design and manufacturing in India’|
Q. Many Chinese STB chip vendors are eyeing the Indian market? How do you view this from competition point of view?
We respect competition which is healthy for everyone. However, there aren’t too many chip vendors that can offer high-quality, performance solutions that have the advanced security integration that the pay TV markets need. India is a large market, but the chip companies need to make reasonable revenue and profits to sustain their focus on India. Chips have a long shelf life and successful chip companies need to be around to support the systems through their lifecycle. Also, innovation needs to continue with a pipeline of improved solutions. Both of these require a business to have a high scale; else, this is not a sustainable business model. We have seen several chip companies come and go, and only time will tell whether any new entrant is able to sustain their initial focus on India.
Q. What kind of opportunity do you see from cable TV digitisation?
Govt initiatives have helped stimulate growth and business thinking. The cable digitisation mandate was an important milestone to take the Indian broadcast sector to the digital era, something that most governments across the world have done. Digital services are beneficial to everyone, from subscriber to operator to government. With a diverse portfolio of STBs, in home networking and home access technologies, this is a very big business opportunity that we are fulfilling.
Q. India is a very price-sensitive market. Since Broadcom also provides hybrid IP STBs, OTT STB and DVB-T2 solutions, how do you see this segment shaping up going forward?
In India, markets are very diverse, and the range spans from the ultra-low-end basic zappers to high-end PVR, Docsis 3.0 and now Ultra HD (also known as 4K) STBs. We see a continued growth of each segment. With increasing digitisation, the numbers of TV homes needing basic zappers will grow. At the same time, rising sales of HD TVs and increasing appetite for multi-screen and hybrid services will bring demand for higher-end STB. We are proud to see Indian operators also look at launching 4K services almost simultaneously with the rest of the world, something we all should be proud of.
Q. How do you see the Indian STB market growing in future and what factors will contribute to its growth?
Analogue shut-off is just the beginning of the growth of consumer electronics. After India completely shuts off analogue TV, the growth will continue due to the following reasons. There is a continued influx of new TV sales which will require STBs, with older TVs being moved to another room or recycled to another home. There is also an increasing demand for HD STBs in tandem with growing HD content and TV sales. Additionally, as India exercises more demand for higher-end services and broadband-connected devices, we see the need for mid- and high-end STBs to replace some of the basic zappers that have been installed.
Watching better quality TV programmes is just the beginning of the beautiful new world of digital TV that India is experiencing. There is an additional demand for features or applications that run on STBs. Multi-room or multi-screen experiences, hybrid OTT content will all bring new higher-end STBs. Below are some examples of use cases that we expect in India:
- Mobile to TV mirroring: Miracast is an industry standard led by the Wi-Fi Alliance to standardise how Wi-Fi-enabled smartphones, TVs, laptops and tablets establish direct device-to-device connections using Wi-Fi speeds. As operating systems begin to roll out support for Miracast, the Indian market will see an uptick in smartphones that are Miracast-based. Use cases of Miracast include smartphone-to-TV screen display via an STB to display photos, play music, show video or gaming. Video could also be recorded on a user’s phone or downloaded onto phone and displayed in real time on the TV set. Similarly, with gaming, Miracast allows the user to go from basic display to multi-player gaming with a private personal screen in hand and a shared public screen on TV.
- Multi-screen experiences: We now have technologies to reformat video in real time in the home for alternate screens available in the home network. This is called transcoding and can be done on affordable STBs and some of our mid-tier STB portfolio also. This enables some very interesting use cases that operators are excited about and subscribers can benefit from. For instance, live broadcasts may be reformatted and transmitted to smaller screens enabling a second screen in the same room, a ‘picture out of picture’ use case where the child could be watching a second show using a tablet and a headset. Another use case would be to take video on the go; recorded shows could be securely loaded onto smaller mobile devices to allow catch-up of favourite shows while travelling.
- Multi-room experiences: STBs are now evolving to a client/server set-up with a primary server STB serving multiple clients across the house. The benefits of this architecture include the ability to have a central home recording and a pool of tuners to serve the full home viewing needs of a family.
- Multi-dwelling units: Evolution of technologies to bring outdoor units, and solutions like Sat to IP now allow solutions to be developed to serve high quality transmissions to multiple units within a building or apartment via a single system installation.
Q. The government is planning to make it mandatory for distribution platforms to source 40 per cent STBs from local manufacturers? How do you see this decision?
India has established itself with its engineering talent. There is no reason why this talent cannot be put to good use for locally designed and produced STBs. We already see increasing local design of STBs and there is an increasing trend of this. One word of caution is that we need to place the subscriber interests at the top. So, the country must accept that it will take some time for us to go from where we are to producing 40 per cent of India’s electronics demand. Industry must be allowed time to establish the needed business scale, talent pool, supply chain management to provide world-class electronics made in India.
In the interest of the citizens, we must not prematurely force local procurement while volumes, prices and quality are not established. We have a very large office in India, the largest outside US. We are ready to support the rising electronics design and manufacturing in India.