Can BSNL stop the landline landslide through IPTV?
BSNL lost a massive 4.4 million landlines during 2007-08 according to the latest figures released. With an annual ARPU of $63 (Rs 2,500) that means a loss of $277 million in terms of revenues. Losses are due to several reasons. But we all know the main culprit is migration over to mobile subscription.
One of the ways to arrest that reduction in lines is IPTV, which BSNL was supposed to be heavily investing in. But I doubt that will help much. At the moment there are 3.13 million broadband users out of a modest total of 38 million landline connections, which means less than 10% of the landline users. Potential IPTV customers in India are just those 3.13 million broadband users. Actually not ... because of this user base around 60% must be enterprise users. So the net IPTV addressable market right now boils down to 1.25 million subscribers.
If MTNL (incumbent operating in Delhi and Mumbai) accounts for half those users, we are talking about 0.6 million or so for BSNL. Compare that to the loss in landlines (4.4 million). That does not really make sense: you are losing 4.4 million lines and trying to arrest that churn by targeting just 0.6 million subscribers - your own subscribers!
If you could talk people into talking up broadband because you have IPTV on offer, that may not work either. That is because satellite TV has established itself as a strong alternative to micro franchise based cable TV. There are already got over 6 million subscribers. It will be difficult to convince the new satellite TV subscribers to switch to IPTV for – most probably -nothing new in terms of content.
India’s Broadband policy of 2004 had set target of 9 million broadband users by the end of 2007 compared to the actual achieved number of 3.13 million. So unless the pace of upgrading infrastructure is increased and broadband penetration increases, IPTV is not going to do any good to BSNL in tackling the landline landslide.
