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October 31, 2008

UTStarcom Discusses India's Growing Broadband Market
By Rajani Baburajan
TMCnet Contributing Editor

Worldwide broadband adoption is propelled by ever-increasing demands for personalized and interactive communications among users. India, the second largest telecom market in the world, is preparing to achieve the goal of 20 million broadband users by 2010. Yet, service providers in India are not happy with the way customers are responding to the technology.


 
UTStarcom, a company focusing on Internet Protocol TV (IPTV (News - Alert)), next-generation networks (NGN) and broadband technologies, is playing an influential role in Asia. In an interview with TMCnet, Manish Matta, senior director of marketing at UTStarcom (News - Alert), explained that the issue in India is not due to a lack of technology, but a lack of consumer awareness regarding the benefits and applications enabled by broadband.
 
TMCnet: What are the most suitable broadband technologies for the Indian broadband market?
 
MM: DSL, Fiber (FTTx) and WiMAX (News - Alert) are all suitable broadband access technologies for the India market. Each technology has its pros and cons. While DSL has a ready market with over 38 million copper lines in India today, this technology had the prevailing issue with the quality of copper. However, that has been resolved to a great extent and we believe India has the copper prevailing today to reach the target of 20 million broadband lines by 2010. The underlying impediment to FTTx has been the cost factor. However, the cost of provisioning fiber is also reducing rapidly and while we have fiber in the core of the network today, we shall see more deployments of fiber to the curb (FTTC) or building (FTTB) soon. WiMAX has the advantage of reach and last mile. However, the disadvantage in the near future is the installed base of WiMAX terminal at users and the associated cost for the same.
 
Also, the issue in India is not technology, but lack of consumer awareness of the benefits and applications enabled by broadband. Consumers are increasingly becoming aware of the applications that can be enabled by broadband. At UTStarcom, we are providing leading edge applications via broadband. For instance, UTStarcom was the first to launch IPTV in India and today we have deployed 4 out of the 5 commercial IPTV contracts in India. IPTV is being enabled over broadband network and UTStarcom remains agnostic to the type of access technology that the operator may have deployed. However, we strongly believe that applications like IPTV, which enable personalization, interactive services and social networking for consumers, will drive the demand for broadband. Broadband users in India will exceed 300 million users in the next decade and we are currently at the tipping point of the growth phase.
 
TMCnet: Broadband in India is going through a slow phase of growth. What are the solutions to improve the speed?
 
MM: Better consumer experience is the primary impetus for broadband adoption globally. Today’s consumer has ever-increasing needs for personalized and interactive communications and social networking. The primary impediment for India’s broadband penetration has been three-fold in our minds: lack of awareness of the benefits of broadband, pricing/user cost and the lack of broadband throughput. All the three factors are being addressed today and let me explain further.
 
India’s core strength includes its educated middle class. However, the same middle class was content with using dial up access over the years. We know that because our Total Control 1000 remote access solution still enables Internet access for over 10 million users today in India. However, as people will realize the potential of IPTV and the associated value added services enabled by IPTV, the pull for broadband deployment will happen alongside.
 
The cost for the user is also reducing quite rapidly. Broadband users were being expected to pay multiples of 4 or 5 for basic broadband services as compared to their basic cable services. The value was not being reflected in the pricing model. However, now we are witnessing a major shift in pricing and we believe, in conjunction with increasing awareness, the broadband penetration will increase rapidly in the next 2 years to meet the goal of 20 million users by 2010.
 
Finally, the broadband throughput is increasingly rapidly and users are finally enjoying the benefits of true broadband in India. Today we are enabling over 8Mbps downstream service for our users in India as compared to the 256Kbps average service being provisioned in the past. Broadband users in India will enjoy the true benefits of broadband. Let me put this in perspective. A standard definition (SD) video stream requires 2Mbps on an average for a good experience. Broadband users in India can enjoy two concurrent SD channel viewing besides having enough throughput (in excess of 4Mbps) reserved for broadband data and voice. Finally, broadband users in India will reap the benefits of triple-play, voice/data/video services.
 
TMCnet: What are the demands of service providers when they select a vendor like UTStarcom in India?
 
MM: Our customers work with us primarily for three reasons: our focus on technology innovation, our solution vision and our culture. Let me elaborate a bit on each.
 
UTStarcom’s DNA is “technology innovation” - our customers, which include various Tier 1 and Tier 2 service providers globally, look upon us to provide cost-effective multimedia solutions and applications that will continually improve how people interact and communicate. Living up to our motto of providing “A World of Better Communication,” UTStarcom has led the market with technology innovations that have revolutionized customer experience. UTStarcom has been the first to market with technologies like IPDSLAM, GEPON and most recently IPTV which have all changed the way people communicate and interact. The focus has been on providing applications that are adapting to the changing needs of the consumers. IPTV has potential to completely change India’s communication landscape as it provides a host of new IP-based value add applications like video calling, digital signage, distance learning, social networking and IP surveillance, amongst others, besides broadcast TV, time-shift TV, VOD (video on demand), etc. UTStarcom was the first to market with IPTV in India and currently provides IPTV solutions to customers like Aksh, MTNL, BSNL (News - Alert), Bharti and UTL in India.
 
The second reason stated is our solution vision and focus. As a company, we focus on three key areas – Broadband, Next Generation Networks (News - Alert) (NGN) and IPTV. Each of these can be highly complicated and cost intensive for our customers, the service providers. To ease the burden, we have focused our development efforts on ensuring a seamless interworking of all our solutions in Broadband, NGN and IPTV. The network management system (NMS), back end systems (BES) and the operations support systems (OSS) are designed to work together such that we can enable services like remote configuration, integrated billing, etc. for all our customers for all our solutions. So our customers who deploy and provision multiple solutions from UTStarcom inherently benefit from a significant operating cost (OPEX) reduction which is a recurring saving.
 
The third reason is our culture. “Customer Focus” is one of the integral core values for UTStarcom. Our success inherently lies in the success of our customers. We do not vie for every opportunity in the markets we address – we have a cross functional evaluation team that scrutinizes every opportunity to ensure some key metrics are met before taking on new customers and/or opportunities. Our stated objective is to work with a limited number of significant opportunities in each region so that we are able to satisfy the demands of each of our customers. Once the project is accepted, we work with our customer to deliver the applications and services that can help them differentiate their services in a cost effective manner. This sets us apart from others.
 
TMCnet: What are the demands of IPTV users and the service providers who offer IPTV services?
 
MM: At a high level, the service provider has three imperative needs when launching IPTV: the need for service differentiation, a cost effective scalable solution and network integration.
 
As countries have deregulated and unbundled the loop, the competition has grown immensely. The imperative need is that of differentiation of services irrespective whether the operator is a traditional wireline, wireless, cable, satellite or even an NGN operator. Today’s consumer is also actively driving the change in behavior as they increasingly long for interactive and personalized services. IPTV provides the launch pad for service differentiation for the operators as they can provide customized services for their user base.
 
Cost effective AND scalable solution is another imperative need for the service providers. As revenue growth has stagnated in many countries, services providers and increasingly looking at reducing recurring expenses to improve their operational performance. However, the cost effectiveness is achieved a large part in the scalability of the network. The IPTV network needs to grow from small deployments (5,000 to 50,000 users) to large deployments (500,000 to million plus users) in a highly cost effective manner. This has been the stumbling block for almost all IPTV vendors today. Their solutions have not been designed to scale effectively thereby making the business case ineffective for the service provider. UTStarcom has built the solution to scale from small to large and proven it in many markets including China where we have over 800,000 live IPTV subscribers on our network today.
 
The third key area is the need for network integration. As service providers may already have existing broadband access, optical core and NGN networks, they have an inherent need for the IPTV solution to integrate seamlessly with the existing networks.
 
IPTV users, on the other hand, have two basic needs: cost effective services and next generation services that meet their needs for personalization and interactivity.
 
In terms of cost effectiveness, IPTV users want to pay the same amount, if not less, for their broadcast TV service. This is the level of service they currently enjoy with cable or satellite TV. However, the user needs to be made aware of the plethora of value add services like time shift TV, VOD, video calling, etc. The user will be willingness to pay the additional price for the value add services once the benefits are proven and realized.
 
Today’s users, as stated earlier, are driving the change in the applications and services being deployed and provisioned. A growing segment of the user today is a highly sophisticated and educated one – what I mean is not education in the traditional terms but in terms of the needs and awareness of personalization and interactivity. Today’s user is highly aware of the interactivity and social networking provided by the Internet. The user needs to be convinced that the same level of interactivity and personalization can be achieved via IPTV and broadband in general, with the additional benefits of service convergence.
 
TMCnet: What the latest trends in the broadband and IPTV market?
 
MM: The latest trends are in the area of personalization of services and interactivity. For instance, our users in China and Japan use Karaoke for their entertainment with friends and family. This is enabled via IPTV. Another key application we see if messaging over the IPTV network where messaging from one TV set to another over IP is enabled. In India, we believe distance learning and digital signage has a lot of potential from a user and from an enterprise perspective.
 
The bottom line is that the broadband network is being enhanced by UTStarcom in conjunction with our service provider customers to enable these activities. Alongside, we are also enabling the value add applications and services that the consumers today are demanding and in some cases may not have even realized.
 
TMCnet: Will it be successful? Where is the market opportunity?
 
MM: Yes, IPTV will be a success. The reason is very simple – as a society, we havebecome increasingly demanding and dependent upon entertainment and communication. IPTV provides the enhanced entertainment and communication that consumers are looking for. The significant point with IPTV is its agnostic nature with respect to the access medium, whether wirline broadband or wireless. Consumers will realize the benefit of seamless wireline and wireless connectivity and the advanced entertainment and communication choices provided by IPTV.
 
In terms of opportunity, both individual users and enterprises will realize the advantages of IPTV. Enterprises will benefit from applications like digital signage where they shall be able to advertise their products and solutions in a more interactive and compelling manner than earlier. Service providers will realize the benefits of digital signage too as this shall open up a new market for them as they shall be able to utilize their existing IPTV and broadband network to deliver content for digital signage. This is simply one in a number of additional opportunities being envisioned and realized today. In effect, we see application developers working on applications not envisioned today by consumers. Bottom line is the win-win for service providers and consumers alike when the next generation network like IPTV is deployed.
 
TMCnet: Why do enterprise customers prefer wireline broadband over wireless broadband?
 
MM: Wireline has had a time to market advantage over wireless. People are not conducive to rapid change and this is particularly important in the case of enterprises they have to cater to basic financial metrics like return on investment (ROI) and payback period. Besides, wireline broadband has had a few proven advantages over wireless broadband over the years, one of which is broadband throughput. Both downstream and upstream throughput for wireline has far exceeded wireless. In today’s day of interactivity, wireline broadband provides the benefit of a bigger pipe while wireless provides the benefit of ubiquity. We believe both wireline and wireless will remain complementary to each other. We are access agnostic with respect to delivering IPTV and associated value add services to consumers and enterprises.
 
 
TMCnet: How can Indian operators offer more affordable solutions?
 
MM: This is something we work hand-in-hand with service providers in India on. The ability to be cost-effective boils down to the service provider’s choice of a solution that can scale cost effectively and that can be integrated cost effectively with other products and offerings on the network. As I have stated earlier, UTStarcom provides the value proposition and differentiation to our customer on both counts. Our IPTV and NGN solutions have been designed to scale cost effectively and deliver the five 9 reliability that carriers are used to on traditional wireline networks. In terms of network integration, UTStarcom has worked on seamless integration of its Broadband, NGN and IPTV offerings and the benefits are realized today by operators like BSNL, MTNL, Bharti and UTL, amongst others, who have deployed UTStarcom’s RollingStream® IPTV solution today.
 
TMCnet: What are your expansion plans in India?
 
MM: UTStarcom has been a leader in broadband for two years running, and we are now clear leaders in IPTV as well. As industry leaders in BB and IPTV, not only do we have the largest market share, but we consider it our responsibility to help the market grow, and act as a catalyst for growth of both BB and IPTV. We hope to maintain this leadership position, and will work closely with different service providers to drive adoption of both BB and IPTV in the country. Our aim would be to deliver the benefits of IPTV to the country and help bridge the digital divide by making TV as an information and product tool apart from providing superior form of entertainment. We hope to leverage on our global leadership in SoftSwitch and NGN to establish similar position of leadership in India for SoftSwitch.
 
We are also working to increase India’s contribution to the global operations of UTStarcom. For example we already have extension of our Global R&D team of BB based in Gurgaon, India, and the Escalation Centre for Asia Pacific is also based out of Gurgaon. This year we have established Centre of Excellence for IPTV in Gurgaon, India, and over the coming years we hope to contribute more to the global IPTV product line of UTStarcom from India.
 

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Michelle Robart

 

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