Archive for July, 2013

Probability of IPTV in Nepal with the partnership of NTC

Monday, July 29th, 2013 | Permalink

Chapter 1
Brief Introduction of Partners
1.1 Executive Summary
There is significant market scope of Television Program in Nepal. The ITU-T has declared the deadline of analog switch off by the end of 2017 AD. By then, all the Television stations of the country including cable TV operators must switch off their existing analog system and change over to the digital system. In that case, Nepal Television has to replace all its analog terrestrial transmitters into digital and the market scope will not significantly change. It is the reason why Nepal Television looks into the avenues of the alternate market field to extend its scope of presence and the increment in the revenues. At that time of transition of Analog to digital, Nepal Television can get the significant opportunity to attract people towards the new technology of the Television which properly replaces the existing analog Cable TV using Digital Television in the cable; that is IPTV.

Nepal Television is not able to handle all the parts of IPTV itself so that it needs the strong partner which is rich in the Telecommunication sector because signal distribution part is very significant and big investment. It needs strong partnership to carry out the desired result in the project. An IPTV cannot only generate the revenues, but also is the best substitute of the existing analog CATV and the various digital TV channels will be available in the same PSTN Telephone line which carries voice, video and data simultaneously. Nepal Telecom has the huge infrastructure of PSTN Telephone line and that has not been consumed completely. IPTV will use the unused infrastructure and revenues also will be generated significantly.

1.2 Introduction of Partners involved

1.2.1 Nepal Television
Nepal Television is one of the partners for this IPTV project. Nepal Television has already two Television channels and has huge infrastructure, manpower and long time experience for Television Program Production. Nepal Television has amiable relationship with different Television Channels across the Word. That is why Nepal Television will be able to manage the content for the IPTV.

1.2.2. Nepal Telecom
Nepal Telecom could be the best partner for the IPTV project since it has huge infrastructure of PSTN line distribution across the country. Nepal Telecom has used its PSTN copper wire for voice and ADSL Internet Service. Still, there is a lot of potential Bandwidth to use IPTV which will be win-win situation if that is used by the IPTV. Being Nepal Telecom a state owned organization, there are similarities between Nepal Telecom and NTV which minimizes the legal and the administrative hurdles in the partnership.

Chapter 2

Business Model

2.1 The Structure of Partnership
There will be two partners in this project-Nepal Television and Nepal Telecom both state owned organizations of the country. The project will be growing in their partnership having their distinct responsibilities to complete, enhance and grow up the project.

2.2 The responsibility and task of each party

• NTV shall provide all the Television channels to be used in the IPTV. NTV will bear the responsibilities to contract with all the Television Stations to use the Television Channels in the IPTV. Nepal Television will use its both channels; will contract with other popular Nepali Channels and many other popular International Television Channels.

• Nepal Telecom will be responsible to decode the channels, multiplexing them, encoding, scrambling and sending to IP network. The IP Network Infrastructure shall be borne by Nepal Telecom. Nepal Telecom also shall be responsible for billing and monitoring of the IPTV.

The above two parties will work together to obtain the permission from MOIC for the project.

2.3 Critical Factors in the Partnership

The policy and permission for the project will be the significant critical factor. So, MOIC should have significant role for the permission. Similarly, tax, VAT and profit sharing will be the critical factor which needs to be managed carefully.

Chapter 3

Background of IPTV

3.1 Definition of IPTV
IPTV (Internet Protocol Television) is a system through which television services are delivered using the Internet Protocol suite over a packet switched network such as Internet, instead of delivering through traditional terrestrial, satellite signal and cable Television formats.

IPTV Services may be classified into three main groups:

• Live Television, with or without interactivity related to the current TV show.

• Time Shifted Television: Catch-up TV (replays a TV show that was broadcast hours a days ago), start-over TV(replays the TV show prom its beginning)

• Video on Demand (VOD): Provides the required video on demand that may or may not be the TV program.
Note: IPTV is different from Internet Television.
The official definition of IPTV approved by ITU-T is: “IPTV is defined as multimedia services such as television, video, audio, text, graphics, data etc. delivered over IP based networks managed to provide the required level of quality of service and experience, security, interactivity and reliability”.

3.2 Global Trend of IPTV
Since the World is going to switch off the analog and traditional Television Broadcasting system and switching over to digital Television Broadcasting and content distribution trend. So, IPTV has the best future for the digital television transmission and distribution which has the interactivity, security, reliability and VOD facilities. IPTV is available in the packet based network so that same infrastructure of Internet and voice service can be utilized for the IPTV; that is why; IPTV became popular in a short period of time. IPTV can be received not only in the Television receivers, but also in the computers and mobile phones. The IPTV has the big market across the World.

Map of IPTV countries of the world.
Shadow: Countries where IPTV is available in at least some parts of the country

3.3 Nepal’s Analog Switch off by 2017
ITU has already declared the deadline to completely switch off analog Television and switchover to digital by 2017 in Nepal. By then, all the analog CATV services will be disappearing in the market and people will be looking for the best alternate of the old analog CATV. Since, Nepal Telecom has the wide distribution of PSTN Telephone network and has already provided voice and Internet service. If we could add Television Channels in the same infrastructure in the existing PSTN line, people will have the best alternate to use the IPTV because they will enjoy the voice, video and data simultaneously in the same cable. So, it is the right time to utilize the PSTN infrastructure to make people available multiple services and generate genuine revenue from the unused infrastructure.

Chapter 4
Introduction of IPTV
4.1 Overview
IPTV is a method of securely distributing video content to televisions over a managed two-way network IP infrastructure that enables a more customize and interactive user experience. IPTV can enable interactive content such as interactive advertisement and real time network based functionalities on a regular TV Set, computers and hand-held devices like cell phones. IPTV can allow people who are separated geographically locating to watch movie together, while instant messaging and exchanging files simultaneously and supports rich Video on Demand Service. It provides real-time Television Chanel services, interactive service and video on Demand simultaneously using Internet based Network. But it is not an Internet TV which has high reliability, security and quality of Service.

4.2 IPTV users’ trend
According to study by consultancy firm Detecon International, the market of Internet Protocol TV (IPTV) in Germany is set to grow strongly in the next five years than previously predicted reaching over five million users by 2013. The study reports that IPTV operators will plough further investment into advertising their value-added services and will become more involved in programme production, and therefore have the ability to ‘directly address end-customers for the compilation of attractive offers. So the IPTV users are increasingly exponentially over the time.

4.3 Features
1. Interactivity – The interactivity of an IPTV system is one of its major selling points, as not only does it allow you to access pictures/videos from your computer on your television; but the system can also be adapted to allow the viewer to search content by title and/or actor’s name. Viewers can also channel surf without leaving the programme they’re watching and review stats of a certain player whilst watching live sport.
2. Record, watch and pause live-TV.
3. Tailor the channel selection available to suit premises, wherever you install the service. If required, you can display digital signage or in-house channels via the service too.
4. Multiple users without affecting the performance – it doesn’t matter how many people are connected that won’t affect the bandwidth.
5. Video-on-Demand – This allows any authorized user attached to your computer network to access videos and various other multimedia devices which are stored on your system. This makes the installation of IPTV within schools and colleges extremely beneficial, due to reducing overhead costs.

Chapter 5
IPTV Market Analysis
5.1 Market Analysis
There are more than 600,000 PSTN users in the country. When the large number of services will be available in the same system, the demand of the PSTN lines will be increased drastically to get the voice, video and data services simultaneously. The data of the Nepal Telecom says that the numbers of Internet users are increasing day by day. The more the Internet users, the more will be the IPTV users. So, the market of IPTV will increase over the time.
5.2 Advantages of IPTV and the Joint Venture
5.2.1 The Advantages of Implementation of IPTV for users
• Live Television Programs
• Interactive Television
• Video on Demand
5.2.2 The competitiveness of the Joint Venture
Each partner could contribute its core resources to the joint venture, making it possible to grow rapidly and win subscribers from traditional operations.
Diversity of income
The joint venture has a variety of ways to make profit. Besides the monthly fees on TV or mobile devices, it can also provide value added services, e.g. VOD (Video on Demand). As the demand of education, tourism, and TV shopping grows rapidly, the joint venture can establish some channels and rent to educational Institutes, tourism agencies, or TV shopping companies.
Low Cost
The cost of the IPTV users will not be more than the traditional cable users with additional facilities and value added services. So, the ARPU will be reasonable for the users.
Management Team
Nepal Television has the experienced managerial and Technical team working since last 27 years.
Nepal Telecom has very long history and has strong managerial and technical team.

Chapter 6
Market Strategy
The market strategy will be always subject to the best performance for long lasting business operation with best return and reputation of the organizations.
6.1 Pricing
The pricing mechanism will include the fee structure, regional difference and competitive methods.
6.1.1 Fee Structure
The fees subscribers should pay will comprise of set-top boxes to watch IPTV on Television Set, installation expenses and subscription fee. The subscription fee will be almost the same as the traditional cable fee.
6.1.2 Regional Difference
The subscription fee can be differentiated for city based users and rural users.
6.1.3 Competitive Methods
The subscription fee can be determined on the basis of competitors’ charge.

6.2 Market Plan
The market plan can be determined on the basis of density of population. In Kathmandu valley, around 100,000 subscribers may use IPTV in the first year and there could be the increment of 50% every year for successive five years.

Chapter 7
Technical Solution
7.1 Overview
The technical solution adopts the digital pay-TV system based on IPTV standard via ADSL Internet using wired and WI-FI technology for PC, TV, and cell phones. It consists of live programs, interactive, and VOD facilities.

A Typical Block Diagram of IPTV (Courtesy CCK)

Technical Diagrams

Subscribers will receive dozens of TV Programs under the conditions of installations to receive in any device.

7.2 IPTV Building Blocks
1. Content (Sources of content)
2. Head end (Decoding, Multiplexing, Encoding)
3. Distribution (IP Network)
4. Home Network (PC or TV with Set top Box, ADSL Internet)
7.3 Technical Risk and Opportunity
People may not be able to operate the IPTV because of the computer illiteracy of the rural people
Subscribers have the Television Facility at anytime, anywhere and any device.

Note: The financial Calculation for ROI (Return of Investment) will be included in Feasibility Study Report. That needs the careful evaluation of cost of equipment and ADSL Service cost.