Operators use TV to defend 3G Revenues?

Stop us if we’re getting the wrong end of the stick here but we thought the whole point of mobile digital broadcast TV (DVB-H, FLO, DMB, even MBMS etc) was to do with the fact that if operators started streaming real live TV out over their 3G networks as unicast, and everyone started watching it, they could support a very small number of channels, the user experience would be rubbish and the network would quickly get maxed out with a million phones all streaming the same content.
Yet following the BBC’s announcement of a year long “trial” deal with three UK operators, 3, Vodafone, and Orange to stream three channels live to users on the mobile networks in question, it seems the network operators themselves are quite happy with 3G being the delivery medium for live, mass market, TV channels.
With operators already supplying Sky, Channel4 and other broadcast content as a live simulcast, a Vodafone spokesperson didn’t see there being any capacity issues going forward. And obviously the advantage of streaming live TV out over 3G is that it doesn’t require the 3G user to upgrade to any fancy new handsets. You could also argue, if you were being mischievous, that it also pumps up 3G data usage pretty nicely.
“We launched commercially in late 2005 with 20-40 channels, including Sky and Channel 4, and we have seen massive usage but no capacity issues,” the Vodafone man said, “and this is all simulcast.”
“At the moment [network] capacity is not an issue, although it is something we need to be aware of and there are bits and pieces, such as HSDPA and splitting streams, we are considering. But 3G has provided a very good way of broadcasting TV at good enough quality – although again that’s not to say we are not considering other bits and pieces.”
Head of TV & Video at Orange Deborah Tonroe, told Mobile Europe that the company has been streaming live TV over 3G since they started the service and at current user levels has no capacity issues.
“Technically we’ve been doing synchronous streaming since day one, with nine live streaming channels, and the BBC brings a new dimension to that. At this time 3G is more than adequate given the size of the market for TV.”
“Future technologies are still some time away, with several issues [regulation, spectrum] hampering potential development,” Tonroe added.
And although she said Orange would continue to look at other technologies, she said “the jury is still out” on whether other technologies will even be required. Capacity problems caused by large numbers watching the same live broadcast are not a given, Tonroe said.
“It would become a problem within a single cell if everyone all tuned in to the same programme at the same time, but it doesn’t work like that. Our viewing habits are not synchronous, just as not everybody makes a telephone call at the same time in the same cell.”
Vodafone’s spokesperson said Vodafone would be including the BBC channels (BBC One, BBC News 24 and BBC Three) into its “Variety Pack” package, which users get for £3 a month. Access to Sky Sports costs £5 a month, and Sky News £3 a month. Or you can get everything Vodafone offers for £10 a month.
Vodafone is making as much money from TV subs as it is now from on-portal sales of ring-tones, the spokesperson added, giving some idea as to the earnings potential of TV over 3G.
Tonroe said that Orange would also be offering the BBC channels within its existing packages, calling them “bonus channels – for want of a better world”. She said the BBC was using its year’s trial to understand the potential of mobile and to learn from first hand experience of customers.