On Monday two major companies USA`s Microsoft and India's Reliance Communications signed a 500-million-dollar deal to launch India's first high-definition Internet TV service.

The Internet protocol Television (IPTV) will start early next year in 30 cities including the financial hub of Mumbai and the capital New Delhi, Microsoft Chief Executive Steve Ballmer and Reliance Communications Chairman Anil Ambani told reporters Monday, an eight-year exclusive alliance for IPTV services, which the former plans to launch in India by March 2008.

RCom will pay up to $500 million to Microsoft in licence fees for the US company’s Media room IPTV software platform. The service will offer both high and standard-definition TV, personal media sharing, VOD and PVR capabilities.

The service will be delivered through RCom’s fibre optic network, which covers 13,000 towns and five lakh villages in India.

However, officials from neither company would comment on the pricing strategy for the initiative. The platform will enable Reliance’s IPTV service to deliver video-on-demand, digital video recording, instant channel changing and personal media sharing. Subscribers will be able to watch popular standard definition as well as high definition content.

The companies have been working on the IPTV platform since 2003 and will roll out the service by the end of this financial year. RCom has tested IPTV at over 20,000 households in Mumbai and Delhi.

On the positive note Ballmer stated “IPTV is in its early stage in India, but would catch up in 12-24 months. Most of it will happen in two countries, India and the US, and in India we are expecting tens of millions of customers,”.

Reliance is also planning to go ahead with its DTH service in collaboration with Bluemagic DTH platform which was scheduled to launch by the end of 2007, but has slipped to first quarter of 2008. The service will Measat-3 satellite to beam MPEG4-compressed programming into the sub-Continent. RCom holds 20% of Bluemagic at the moment, with the rest held by subsidiaries, but is moving towards making the DTH service a 100% subsidiary. However, Reliance is coming to the DTH party late, with TataSky, DishTV and Sun Direct already operating pay-DTH services.

Source: (ZDnet INDIA, AFP, Rapid TV News, Business Standard)