MUMBAI: Apple finally opened its iTunes Store in India in December, joining services such as BigFlix, NyooTV, Eros Now, hungama and DittoTV from Zee New Media. In Malaysia, pay-TV provider Astro has launched Astro-on-the-Go to compete with TonTon, Maaduu, DETV and Fine TV.

But will flagging broadband speeds prove an insurmountable barrier for the development of OTT in the region? To answer this question, Farncombe undertook a study of the broadband markets in five key SEA developing countries: India, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Farncombe analysed fixed and mobile broadband service offers, technologies, nominal and actual bitrates and pricing plans.

The company is a professional services firm offering technical and strategic support across all digital media sectors, with a focus on TV. Farncombe‘s study shows that around 30 per cent of the existing fixed broadband residential subscriptions offer speeds that are equal to or higher than 2Mbps - the threshold required by many OTT service providers for delivering video content to connected devices, including TVs.

The company forecasts that this percentage will reach almost 50 per cent by the end of 2017 - with more than 25m fixed broadband connections ? 2Mbps across the six countries by then. India will lead, accounting for 28 per cent of the households in this segment, followed by Vietnam and Thailand.

Farncombe‘s research shows that ADSL technology will remain the dominant fixed broadband technology in the region, but its share will drop from 84 per cent in 2012 to 65 per cent in 2017.

Cable (especially in India) and FTTx will gradually increase their presence in the main cities and will increase with CAGR 2013-17 of 31 per cent and 36 per cent respectively. Wireless Broadband Access (mostly WiMax) and other technologies (e.g. Satellite, Ethernet, etc. ) will remain niche alternatives with limited market shares.

Malaysia emerges in top position in terms of FTTx connections across the six SEA territories, with the average download bitrates increasing at a CAGR of 25 per cent in the final three years to 2017. However, the average bitrates in India, Indonesia and Vietnam are increasing at a CAGR of less than 10 per cent , bringing the average regional speed up to just 1.5Mbps by the end of last year.

Most fixed broadband plans now include unlimited usage, unlike mobile packages, which are typically ‘capped‘ - an issue that still inhibits OTT usage over mobile broadband. Farncombe compared fixed and mobile broadband costs by looking at how much each charged ‘per Mbps‘, taking into account actual bitrates and mobile usage caps. The company found that on average mobile broadband users would have to cap their monthly use at 1-3Gb to obtain the same ‘per Mbps‘ price-performance as a fixed plan.

Similar results were derived across all six markets, demonstrating that despite the significant increase in mobile broadband users - which we expect to reach nearly 0.5 billion subscribers by 2017 with a CAGR of 37% across the six countries - fixed broadband remains a much more cost-effective choice for video use.

As competing two-way platforms will require substantial up-front investment, especially for countries with challenging landscapes like India, Indonesia and the Philippines, OTT platforms can offer significant opportunities for players in these regions to reach audiences and capture market share more cost-effectively and with tighter launch-schedules.