Mobile TV – high hopes, dire doubts — MobileMonday Global: Industry News

^{Technology this year, user in 2006} Mobile TV – high hopes, dire doubts

27 Feb 2005 at 09:42 GMT Timo Poropudas

The next big thing in mobile industry is mobile TV. There is wide spread belief in this new media while some doubting Thomases are acting as party poopers.

Nokia and the major Finnish TV and telecom players will introduce mobile TV to media on March 8 in Nokia headquarters. The media invitation talks about internationally significant press conference about unique mobile TV pilot project.

One of doubters is Strategy Analytics. The market research company has released a report that is arguing that the vendor-led rush to bring broadcast services to market misses the critical issues of uncertain demand for mobile TV.

The company says that poorly defined costs associated with infrastructure deployment will extend ROI for mobile broadcast networks beyond the currently envisaged two to four years.

Starring in Cannes

The mobile TV was one of the media stars at 3GSM World in Cannes earlier this month.

“The citizens of Cannes may have been under the impression last week that television on a mobile phone is already a reality, because the city was covered in posters from handset vendors advertising the service on new models during the 3GSM mobile communications trade show,” Reuters reported.

“I think TV and video will drive demand more than camera phones in places like Korea, Japan, Europe and the Americas,” Alex Mandl, chief executive of French smartcards for mobile phones maker Gemplus, told Reuters at 3GSM.

Tapping the well-entrenched TV viewing habits of the public, market research group Gartner expects that real-time TV to mobile phones will be commercially available across Europe in 2007. The technology itself may be ready sooner.

“Imaging was last year; music is this year; video is next year,” said Hugh Brogan, chief executive of British handset maker Sendo.

Testing all over

Across the globe, numerous trials are being announced to evaluate whether standards and technologies from the world of digital broadcasting can be adapted and married with mobile cellular services for access through converged handheld devices.

Nokia is piloting DVB-H with wireless tower operator Crown Castle in the United States and Bridgeway Networks in Australia. Trials are also taking place with O2 in UK and a limited trial has been going in Finland among others.

Crown’s network will rival Qualcomm’s U.S. network, called MediaFlo, which will not work with DVB-H. Qualcomm claims its own TV network is better suited for mobile devices, requiring less energy and allowing quick channel switches.

Consumer demand in doubt, or is it?

Strategy Analytics believes that the momentum that has been rapidly built behind mobile broadcasting is unfounded. “Consumer demand for paid for Mobile TV remains highly uncertain, and we remain unconvinced that consumer appetite for mobile TV services exists outside of niche segments,” according to Phil Taylor, Director, Strategy Analytics Global Wireless Practice.

Still, the Berlin trial by Nokia and Vodafone showed 80 percent of consumers would want TV services on their mobiles and would be willing to pay on average 12 euros a month extra for it.

The business case is still largely open. According to a Merrill Lynch note about the 3GSM fair in Cannes the European operators appear to be unclear at this time about how the mobile TV service will be priced, and there are still issues with battery life and screen size.

In Taylor’s opinion operators have the perfect opportunity in 3G to see if mobile video services will fly, without further extending themselves into the provision of broadcast services.

Cedric Ponsot, CEO of Vivendi Universal’s Mobile International agrees and says that the mobile industry, as ever, was fixated on the next big thing rather than developing applications and revenues for networks available today.

Four challenges

David Kerr of Strategy Analytics puts the doubts this way: “Beyond the basic business case and potential cannibalization factors, mobile TV faces four key challenges:

“The technology roadmap is far from stable; regulation and low spectrum availability may also act to slow the spread of services; beyond the technophile segment there is slow diffusion of media-enabled devices; and uncertain revenue models and value chain reconciliation will deter content industry participation.”