According to a Gartner report, Internet Protocol Television (IPTV), being billed as the next big thing, will in reality face a raft of problems that will hold it back for at least five years. The foremost of the problems being the low base of Broadband connections to households in the country.

Despite being a more advanced technology capable of additional functionality, IPTV is not well placed in India when compared against other digital broadcast distribution channels such as DTH (Direct-to-Home) and digital cable.

Neha Gupta, senior research analyst at Gartner, believes, "The primary reason for minimal IPTV uptake is the low Broadband penetration in India. Without a mass-market Broadband usage in place, the IPTV subscriber base will struggle to exceed 1 million in the next four years."

In 2006, the size of the consumer Broadband market stood at 1.6 million lines, and it is expected to grow to 6.4 million by 2011.

According to Gupta, Broadband penetration problems are unlikely to be resolved without the use of wireless Broadband, either WiMAX or high-speed mobile services.

Besides, existing pay TV platforms seem to be tightening their grip on the market, and would effectively block IPTV operators from capturing wealthy households.

Also, under the pricing regulations imposed on the pay TV industry, IPTV will effectively be priced at the same level as digital cable and DTH, resulting in ARPUs in the range of Rs 300 to Rs 500, as opposed to analog cable users paying Rs 150 to Rs 300. As such, IPTV will not be able to differentiate itself from digital cable or DTH players in terms of price.

Meanwhile, even Indian carriers are not convinced about IPTV offering much revenue opportunity. As a result, they have adopted a new style model that brings in third-party capital and ideas to run IPTV operations under a franchise-style model.

Under this model, carriers hold the IPTV license and the Broadband access infrastructure, while third-party investors buy the equipment, source content, and run operations.

According to Gartner, this model might help speed-up the deployment of IPTV in the early years, compared to what carriers might be able to achieve on their own.

Gupta recommends that carriers should consider moving into DTH satellite to help secure customers who can later be shifted to the IPTV fold or offered interactive services through a hybrid DTH-IP Broadband STB (Set Top Box).

The other thing for carriers to do would be to partner with DTH operators to offer customers a hybrid STB capable of accessing DTH for channels, and using Broadband for video-on-demand (VOD) interactivity.

The hybrid model offers an inexpensive route to triple play, while providing extra revenue through cross-selling pay TV to Broadband and voice customers.