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MTNL's IPTV Sparks Regulatory Debate

Indian carrier Mahanagar Telephone Nigam Ltd. (MTNL) has gone live with the country’s first commercial triple-play service, Triband, and it’s already giving the regulator headaches.

Several major carriers in India are gearing up to offer IPTV, but state-owned MTNL got in there first, launching service at the beginning of November. (See India's Telcos Watch MTNL for IPTV.) The carrier operates in the cities of Mumbai and New Delhi, while sister company Bharat Sanchar Nigam Ltd. (BSNL) provides coverage in the rest of the country.

Since the launch, MTNL has expanded the number of channels available on Triband from 26 to 100, a move that has cable operators saying the government-owned carrier is breaking the law.

According to the Cable Television Networks (Regulations) Act of 2002, operators such as MTNL -- which has a cable TV license -- can only offer free-to-air channels, and must do so without a set-top box. To offer pay-TV channels with a box, as MTNL is doing, they must have a so-called "Unified Access License."

The original 26 channels were free-to-air, while the new lineup includes premium subscription channels.

The Telecom Regulatory Authority of India (TRAI) has declared the service illegal and asked the Indian government’s Ministry of Information and Broadcasting for a legal ruling.

The regulator had previously recommended that IPTV be brought out of the cable act and put under telecom regulations, but backed down after cable operators argued that telcos would gain an unfair advantage since investment and licensing rules differ between the two sectors.

It will be a race against time to figure out the rules as other telcos go ahead and roll out IPTV services of their own. BSNL has been watching MTNL’s progress and plans to launch commercial IPTV in January in five cities -- New Delhi, Mumbai, Kolkata, Chennai, and Bangalore (or Bengalooru). It started piloting services in the city of Pune in August.

MTNL is hedging its bets by using three different franchises to pull together video distribution systems, each with different equipment providers, to run over its ADSL 2 network.

The first franchise, covering both Mumbai and New Delhi, is managed by content aggregator Time Broadband, which was responsible for the trial stage. (See Optibase, Time Team.) Optibase Ltd. (Nasdaq: OBAS) provides the headend, while set-top boxes come from Amino Technologies plc (London: AMO) and Softier Ltd.

Infogate Online Ltd. is providing the middleware, Verimatrix Inc. the content protection, and HP Inc. (NYSE: HPQ) is acting as system integrator. (See HP Touts Contracts.)

In New Delhi and Mumbai, MTNL has recruited Aksh Optifibre Ltd. . Aksh’s diverse business spans from manufacturing optical fiber, to hardware and software management, to content and service delivery. Aksh will use UTStarcom Inc. (Nasdaq: UTSI)'s RollingStreams system, which is also being used by Bharti Airtel Ltd. (Mumbai: BHARTIARTL) in its trial IPTV network. (See Bharti Watches UTStarcom for IPTV.)

IOL Broadband Ltd. has signed on to provide content delivery in Mumbai only. It will be using SeaChange International Inc. (Nasdaq: SEAC) video servers, Amino Technologies plc (London: AMO) set-top boxes, and digital rights management from Widevine Technologies Inc. . IOL will also offer the service to its own broadband customers if they have MTNL phone lines.

IOL has signed content deals with the Star TV network for a range of channels and with Anytime, a video-on-demand movie channel. (See IOL Signs Up Star TV and IOL Signs Up Anytime.) BSNL has also teamed up with IOL Broadband for its service.

MTNL has 183,000 broadband subscribers in Mumbai and 152,000 in New Delhi that it will target first with the Triband service before turning its attention to its 3.76 million fixed-line voice users.

— Nicole Willing, Reporter, Light Reading

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