MTNL's IPTV ambitions hit Trai hurdle

Regulator says basic service providers are barred from offering value-added services.

State-owned Mahangar Telephone Nigam's (MTNL) ambitious drive to become a major player in the internet protocol TV (IPTV) services sector is facing a roadblock. IPTV is a technology that uses telephone lines to provide TV programming to viewers.

The Telecom Regulatory Authority of India (Trai) has shot off a letter to MTNL seeking clarifications as to why it has violated licence conditions under which a basic service operator (BSO) cannot offer value-added services such as IPTV.

The regulator has pointed out that MTNL has reported IPTV tariffs and providing it as a value-added service under the BSO licence.

Under the existing policy, operators with a UASL, which allows an operator to provide a whole gamut of services such as basic, mobile, IPTV, broadband, among others, and cellular mobile telecom services, are allowed to provide "triple play services".

Even internet service providers having a net worth of Rs 100 crore are allowed to provide IPTV services. But Trai says that a BSO licence holder cannot provide this service.

According to experts, MTNL is now left with a choice of applying for a UASL, which would mean forking out around Rs 401 crore for Delhi and Mumbai, which is a hefty one.

The regulator can also impose a fine on the state-owned telecom company. At the moment, MTNL has licences to operate basic as well as cellular services.

However, MTNL executives are ready to take on the regulator on this issue. "We have been operating the service for two years. For us, IPTV is a value-added service being provided by a basic service operator. We will be sending them a reply," says MTNL Chairman R S P Sinha.

MTNL, which has been first off the block to start IPTV services last October, will soon be facing competition from Reliance Communications and Bharti in the IPTV segment as these operators are also readying their plans.

MTNL is targeting around 50,000 customers this year and has already roped in over 6,000 customers since the commercial launch a few months ago.

MTNL charges Rs 250 a month for around 102 channels and an upfront payment of Rs 3,000 as rental for the set-top box for providing IPTV services.