IPTV service opens up options in pay-TV market

The imminent launch of Nigeria’s first commercial Internet Protocol Television (IPTV) service signals greater choice for consumers in the country’s pay-TV market dominated by satellite operators, industry insiders say.

The new service, analysts say, is expected to further deepen the scope of the market in terms of the provision of on-demand TV offers.

IPTV refers to a system through which television (TV) services are delivered using the internet instead of

through traditional terrestrial, satellite signals and cable TV formats.

Last year, ipNX Nigeria Limited, an indigenous fibre optic cable network provider, acquired a TV licence from the Nigerian Broadcasting Commission (NBC) to provide IPTV services in Nigeria. Market expectations are that rollout of this innovative service, in coming weeks, will set the tone for more local and foreign players to explore this virgin but lucrative market.

With global IPTV revenue expected to reach $56.8 billion in 2016, mobile operators are also considering IPTV service as a viable source of revenue as they look to offset steep decline in voice service revenues.

In view of this, telecommunications companies in the country are already planning to make considerable investment in this regard. Though the long-term growth potential of satellite pay-TV operators in Nigeria remains extremely high, according to market analysts, IPTV will indeed challenge its dominance, driven essentially by huge improvements in broadband internet service delivery and pricing.

Sub-Saharan pay TV revenues will reach $5.35 billion in 2020, up by 69 percent from $3.17 billion in 2013, according to a recent forecast by Digital TV Sub-Saharan Africa. But interestingly, satellite TV accounted for nearly all of the 2013 total, the report states.

However, this current situation, industry observers say, would in no distant time change as more indigenous Internet Service Providers (ISPs), Mobile Network Operators (MNOs) and content providers step up investment in IPTV infrastructure, in view of the enormous revenue and wealth creation opportunity. ipNX’s TV service comes as an addition to its Fibre Optic Service (FoS) product bouquet, which offers other services such as internet, telephony, and video surveillance, amongst many others, to homes and businesses at the speed of light.

BusinessDay further learnt that set-up boxes (also known as STBs) have been delivered to 1,000 subscribers of ipNX FoS who are currently testing ipNX TV for functionality, content and reliability. Feedback from these customers is at the moment being used to fine-tune the television system before it is launched to the public.

ipNX TV is an entertainment service that enables consumers choose what they want to watch, when they want to watch it, and how they want to watch it. This is another way of describing features such as Catch-up TV, Video-on-Demand (VoD) and multiscreen device support, which are some of the unique features of ipNX TV.

BusinessDay gathered that the service will be available in Victoria Island, Lekki and Ikoyi at launch but will subsequently be expanded to Magodo and Ikeja areas of Lagos State as well as FCT Abuja.

“We are not in direct competition with cable and satellite operators. Satellite operators like DStv are in the business of content creation. We do not see ourselves delving into that area. But through our IPTV infrastructure, we offer a veritable distribution platform for content developers and creators,” said Ejovi Aror, ipNX’s group managing director, in an interview with BusinessDay.

Simon Murray, analyst and author of the ‘Global Satellite TV Forecasts’, however, thinks otherwise. According to him, “IPTV poses a threat to satellite TV because it can offer bundles (few satellite TV operators offer triple-play) which is an attractive proposition to consumers. IPTV and cable operators can fairly quickly catch up with some of DTH’s (Direct-to-the-Home) advantages such as HD channels and DVRs – and even exceed satellite TV in terms of on-demand TV offers.”

Given the high costs of internet access on the continent, IPTV will not take off in Africa unless it is part of a tripartite affordable service offering on the part of operators, said Gelfrand Kausiyo, CEO of Turbo Worx, at the Digital TV Summit.

“It will take a long time, a lot of effort and some innovation in product offerings to get Africans to respond more positively to the IPTV phenomenon,” Kausiyo said.

Meanwhile, G. N. Ezeh of the Department of Electrical & Electronic Engineering, Federal University of Technology, Owerri (FUTO), has advised ISPs and mobile operators begin in time to invest in IPTV infrastructure and begin gradual migration to IPTV.

In a paper entitled ‘Deployment of IPTV: How ready is Nigeria?’, he said IPTV would resolve the current negative environmental impact of satellite dishes, adding that using the IPTV network, service providers could offer rich interactivity services such as television commerce, voice-over IP (Tele-conversation), video conferencing and gaming.

 “Also, IP-based platform offers significant advantages, including the ability to integrate television with other IP-based services like high speech internet access and VoIP. A switched IP network also allows for the delivery of significantly improved content and functionality,” Ezeh said.