IPTV to challenge cable TV mkt in India, Vivek Raina

Fixed-line internet service provider Excitel is betting on Internet Protocol Television (IPTV) technology to challenge the existing market of 6-7 crore cable TV homes in India, Vivek Raina, CEO and co-founder, tells Subhayan Chakraborty in a face-to-face interview in New Delhi. Serving more than a million homes, Excitel is the third-largest fibre-to-home broadband provider in the country, and plans to expand 3x in the next 5 years, he said. Edited excerpts.

What is Excitel’s IPTV service?
We are bringing broadcast television to the smart TV in your home without the need for a set-top box. Under the earlier regulations, for all pay channels, you needed a set-top box to decrypt the signal. Now, you can do the same through an app. IPTV will run through our WiFi unit, and the customer simply needs to download the Excitel TV app to watch all pay channels. This is not the same as Direct- to-Mobile technology.

What are your expectations from IPTV play?
We have tied up with Multiple System Operators (MSOs) to get the feed, and are acting as the distributor. We want to first test the waters. But according to me, there is a major demand. There are 6-7 crore cable television homes in India, and just 3 crore broadband homes. We see that MSOs are facing a 3 per cent churn per month, which means they’re losing 36 per cent of their users in a year and may not remain after more than 2 years. At the same time, many people will take a long time to switch from cable television to other forms, while some may never switch.

Is content bundling here to stay?
Over-the-top (OTT) bundling is now the rule of thumb. Everyone is doing it. Our bundled OTT plans make up 15-20 percent of our sales. These include Hotstar, Sony Liv, and Zee, and 20 more smaller ones. But all content should reach the home through one wire, which brings broadband. In many countries, that is the norm.

What are your growth plans?
We have crossed a million users across more than 50 cities. We want to triple the user base to 3 million in the next 5 years. We are the third-largest fibre-to-home WiFi provider.

More than a year and a half after the 5G rollout began, do you think it is a threat to WiFi players?
5G has not replaced fixed-line broadband anywhere in the world. 5G towers need line of sight for optimal signals, which happens for only 5-10 per cent of homes. This will not work in urban India. There may be use cases in structured areas with multistoried towers. But the vast majority of India is not like that. Even in structured areas, the quality of the 5G wireless signal will not be as good as one sent to the consumer in a dedicated pipeline without interference.

Has the cost of equipment reduced as a result of local manufacturing?
Prices of WiFi boxes had risen from Rs 1,800 to above Rs 2,300 during the height of the global chip shortage in 2022. With the global shortage of chips now easing, the cost of customer premises equipment has come back to where they should have been 3 years ago. Several manufacturers have now begun to assemble in India, even though the raw materials are imported.

What are your fundraising plans?
We are not actively seeking to raise funds right now. We have deployed the Rs 510 crore raised by us in the last round. It will take time for it to monetise. There may be another round of fundraising later this year, or early next year, though we haven’t started scouting actively.

Are digital infrastructure funds available in the fixed-line broadband sector?
We haven’t seen such funds in the retail wireline broadband space. If they come, it’ll be transformatory since one or two companies can’t wire up the country. There is a direct correlation between wireline broadband penetration and GDP growth. According to the World Bank, a 10 per cent growth in wireline broadband brings in 1.5 per cent growth in GDP. It opens up the economy of those areas which had been previously unserved. So, there is no alternative to fiberisation across the country. Business Standard