CQ: What is the role of Cable TV digitisation in enhancing broadband penetration in the Country?
Sisir Pillai: As such there is no direct correlation between Digitization of Cable TV and an increase in Broadband penetration but at a different level there is a deep connect between the two. To explain this statement better it is important to understand and appreciate the relevance and importance of the distribution infrastructure laid out by the Cable TV Networks across the length and breadth of the country. Currently this infrastructure is used predominantly for delivering Cable TV services, but a major portion of this infrastructure with some augmentation (Capex investment required), can be used to deliver Broadband using either DOCSIS or Ethernet-based delivery systems.
On answering specifically to the question, on how DIGITIZATION is driving Broadband penetration, one can say that the LMO’s & MSO’s, on account of the diminishing Margins in Digitization due to stagnant revenues on one hand and on the other hand a 100% declaration which has resulted in increased cost and overheads are now more inclined to looking at Broadband to shore up both margins and revenues. Moreover, ARPU’s are significantly higher for Internet & Broadband services and at the same time the revenue is shared between only 2 stakeholders i.e MSO and LMO (unlike in Cable where Broadcasters also get a share) and therefore margins are much better in this business resulting in more and more cable operators offering Internet services.
CQ: Please elaborate upon Lukup's strategy for launching its services including Cable TV and Broadband?
Sisir Pillai: Lukup plans to offer our services predominantly through the LMO’s, where we will be using their ground infrastructure to reach the end-consumer. We will be offering Consumers a never-before experience of getting Bundled or Converged services through a single connection and a single device. The Lukup offering will be a combined offering providing Linear TV, Non-linear TV, VoD, e-Commerce, Gaming, Home automation & security systems and bundled with Internet & Broadband services. Being an IP platform, the customer can access a host of International Content, for which there is a huge latent demand.
What is even more appealing, especially for the Millennial generation and discerning subscribers is that one can connect all Smart devices in a household through the Lukup Player (Lukup Device which combines the functionality of a Set Top Box and Broadband Router) for a very personal viewing experience on their individual handset or smart phones.
CQ: How are you phasing out your service rollout?
Sisir Pillai: We have planned to rollout our services in a staggered manner, starting in Mumbai, Pune, Bangalore, Hyderabad and Delhi in the current calendar year and in the 2nd Phase we will roll out our services in Kolkata, Chennai & Ahmedabad and in the 3rdPhase we will be covering all the 1 Million + Population cities, which we hope to complete by end 2016. Most of the cities and towns contiguous with the above mentioned cities will also see a roll out almost simultaneously or within months of the roll out in the main cities.
CQ: How many cable operators have you tied up with, so far?
Sisir Pillai: Testing of our services are ON in the Phase I cities, except Delhi and we have already tied up with more than 500 LMO’s in these cities, with many more evincing interest in our services. What is important from our point of view is to start offering the bundled services to the consumers and this will immediately bring in more traction in numbers.
CQ: What is the general response of consumers availing your services? How do they see it different from Cable TV services?
Sisir Pillai: While the services are yet to be launched to the consumers, we have started live-demos and Trials in a couple of networks in the Phase 1 cities wherein we had undertaken a detailed marketing exercise to gauge Customer experience and we were pleasantly surprised with the enthusiastic response. The research was conducted by a leading marketing agency in Mumbai and there will be more such customer-end trials conducted in Ahmedabad and other cities.
Some of the Key points that the sampled consumers found differentiating and radically different from the plain Linear TV that cable is currently offering are :
a. Catch up TV with the non-linear features
b. Bundled Service of Cable & Broadband through a single device resulting in less clutter at the customer household. What appealed to some of the customers sampled was also the fact that the Lukup Player was not visible and due to its small size got hidden behind the TV.
c. Real streaming VoD through an assured bandwidth
d. Accessing Internet through a very fat Internet pipe allowing them to stream a host of International Channels and watch the latest International content
e. Home Security and Home Automation features
CQ: What all types of services are you providing, we mean Cable TV, VOD, Interactive Channel, OTT etc?
Sisir Pillai: Well, we will be offering all the services offered by traditional Cable TV, which is Linear TV including pay channels and in addition to that we will be offering Non Linear TV including Catch-Up TV with all the trick-play functions and access to a host of International TV services. On VoD, our offerings will include SVoD , where a certain number of Movies and programs/content will be offered for a fixed period (ideally monthly) and VoD, where subscribers can stream Premium content, anytime, on demand. Our Lukup Player comes with a built-in Wifi Router and therefore can connect all smart devices within the home and this will enable subscribers to stream content to connected devices enabling viewing of multiple content through different connected devices.
CQ: Can you please elaborate on technology you are deploying and how it is different from normal digital Cable TV network?
Sisir Pillai: Digital Cable TV works on RF networks, which is almost entirely unidirectional, whereas Lukup services uses IP as a transmission medium, which is superior due to its inherent bi-directional nature enabling 2 way communication, allowing us to offer Internet and Broadband services and Interactive Value Added Services as well. Current Cable TV Networks being unidirectional is constrained and Internet, if offered is through a separate infrastructure.
CQ: What ARPUs do you expect and how do you plan to share them with your Last Mile operators?
Sisir Pillai: While we will firm up our plans on both ARPU’s and share to the LMO’s, our services will only have the bundled offering of Cable TV (both Linear and Non-linear TV) and Broadband Service, as well as VAS services. Our endeavour is to significantly increase the ARPU’s and we plan to offer the LMO’s a fair Service charge, which will enable them to earn much more than their current earnings. The net take-home / net income from the same infrastructure for the LMO’s will be much higher than their current earnings.
From the Consumer’s perspective, the price will be much lower than their current payout while availing both the services (Cable TV & Broadband) separately with far more advanced features and greater width in the service-offering.
CQ: How are you coping us with competition from other MSOsand DTH companies, particularly in convincing subscribers to take your services?
Sisir Pillai: We don’t see ourselves as competing with MSO’s or DTH companies, but we see ourselves as complementing their services. Our services will be for the discerning subscriber who are keen on getting a bundled service being offered alongwith VAS services .