Although Viviene Reding may have made her mind up, the range of mobile TV services now live in Europe shows that operators are still making their own choice. Ian Volans reports.
Speaking at a Mobile TV conference during CeBIT, EU Commissioner for Information Society and Media, Viviane Reding, caused consternation when she said, “I am prepared to give strong support to European standardised solutions such as DVB-H.”
As well as dismissing the recommendations of the European Mobile Broadcasting Council, an advisory instigated by Ms Reding encompassing mobile and broadcasters sectors, her comments represented a retreat from the EU’s formal policy of technology neutrality. Her apparent support for a mandated technology also contradicted her call for national regulators to apply a light touch to ensure the nascent industry can flourish.
In support of the EMBC, the European Broadcasting Union emphasised the need for European policy to consider all the issues that will drive the take-up of new services such as mobile television. These include content copyright and spectrum as well as interoperability and open standards.
Fritz Pleitgen, President of the EBU, said, “While we continue to support open standards and interoperability, we believe that the pace of technological development precludes the adoption of any one standard for mobile broadcasting at this stage.”
Coinciding with Informa’s Mobile TV World Summit in Munich, Ms Reding’s comments caused more than a few raised eye-brows and furrowed brows among speakers and delegates.
Common themes to emerge in Munich were the reticence of some operators to divulge customer bases, the international trend towards shared broadcast networks – a development supported by Ms Reding at CeBIT – and the importance of a competitive range of TV-capable handsets.
While DVB-H has been commercially launched in Italy and Finland, other technologies such as T-DMB in Germany and DAB-IP in the UK are already integral to mobile TV in Europe.
With three mobile operators offering services using DVB-H, Italy is currently the most competitive mobile TV market in Europe, and by chance, most in tune with the Commissioner.
Italian broadcaster Mediaset wholesales transmission capacity on its DVB-H network, and separately provides access to some of its own terrestrial broadcast content, to both Telecom Italia and Vodafone. Coverage currently extends to more than 75 per cent of the Italian population.
The mobile operators are responsible for selecting their “bouquet” of channels and negotiating rights. As audiences build, and measurement systems are developed, the mobile operators will also manage the sale of advertising within their services.
Telecom Italia launched commercially in June 2006. Its service consists of eight mainstream TV channels for a monthly fee of €5. Vodafone launched a bouquet of nine channels in December at €9.90 per month.
David Bogi, Head of DTT New Projects at Mediaset estimates that by the end of 2006, there were a total of 300,000 users on the Mediaset DVB-H platform.
While the shared platform is currently simulcasting mainstream television, Mediaset is developing made-for-mobile channels that it intends to offer to mobile operators in future. “I’m totally convinced that it’s fundamental to have content coloured by the mobile user experience,” said Bogi.
Gian Paolo Balboni, Senior Program Manager TV & Multimedia sees mobile TV as just one element in the Telecom Italia service portfolio. As the prices of compatible handsets fall from their current levels of around €500, he expects growth to accelerate.
3 Italia launched its DVB-H service a few days before Telecom Italia in June 2006 with an offer of live coverage of FIFA World Cup. Unlike its rivals, 3 owns its own DVB-H network having acquired, and adapted, a DVB-T digital terrestrial broadcast network.
3 launched with 12 channels including mainstream Italian TV content from Rai and Sky and is currently unique in offering content from both of Italy’s major broadcast groups by including a “best-of” channel from Mediaset in its bouquet. In its recently published year-end results, Hutchison Whampoa, 3’s majority shareholder, disclosed the service had 400,000 users at the end of 2006.
Mobile Fernsehen Deutschland, is one of the European mobile broadcasters whose long term prospects may be questioned in the light of Commissioner Reding’s support for DVB-H. MFD launched its T-DMB service in May 2006.
Reflecting the federal approach to media licensing and spectrum allocation in Germany, MFD is not yet available throughout the country, even though it holds DMB licenses in all Länder. More than sixteen million people live within the MFD service area, which includes cities such as Berlin, Bonn, Cologne, Dortmund, Düsseldorf, Frankfurt, Leipzig, Hamburg, Hannover and Munich. The company’s policy of technology neutrality means it may participate in any future DVB-H licensing process.
A “white-label” wholesale product, the MFD service is currently retailed through three MVNOs: Debitel, Mobilcom and Simply. Handsets have been released by Samsung, LG and Nokia.
BT Movio is another company that doesn’t fit neatly into Commissioner Reding’s vision. Last September, Movio launched a wholesale proposition that includes five TV channels and all DAB digital radio stations that can be received at the user’s location – typically between 30 and 50.
A vocal champion of digital radio, Dominic Strowbridge, Marketing Director a BT Movio said, “People love mobile TV but they use radio more: there are more opportunities to use radio during the average day. “
Born out of an EU-supported research project, DAB has been widely adopted for digital radio. The technology can be deployed in the FM band and in the L-Band at around 1.4 MHz.
According to Strowbridge, “The choice of DAB-IP was primarily based on the fact that the network existed. It was far cheaper to use an existing network than build a new one. The Digital One [DAB radio] network already covered 85% of the UK and had spare capacity.”
Consistent with its UK strategy centred on migrating all its services to IP, BT’s enabling platforms such as Movio are designed to deliver services over any IP bearer and could potentially work with DVB-H in the future.
With only one compatible handset currently available, the service appears to have had limited traction so far. Virgin Mobile, Movio’s sole retailer, currently includes mobile TV in a £25 per month contract or offers it for a monthly charge of £5 on prepay. Four or five new devices are expected to reach the market in time for Christmas 2007.
The problem with an economy-of-scale justification for a single European standard is that it needs to acknowledge developments elsewhere in the global market.
Korea, with its competing DMB services, is probably the most advanced mobile TV market today. (As a Korean-inspired derivative of DAB, DMB can also claim European ancestry.)
TU Media launched a nationwide service based on the S-DMB satellite standard in May 2005. Of the $400 million investment, half has been spent on terrestrial repeaters that fill gaps in coverage, boost indoor coverage and extend service to underground transport networks. Today the service reaches 95 percent of the population.
Since reducing pricing to a monthly fee of $11, below the psychological 10,000 Won barrier, take-up has accelerated. TU Media’s user base stood at 1.15 million users in mid March. Terminal prices, which are largely unsubsidised, have also fallen since launch from an average above $1000 to $500-$600.
According to CEO Dr Young-Kil Suh, TU Media expects to attract a million new users this year and has a target of 6.6 million subscribers by 2010.
All three of Korea’s mobile operators act as distribution channels for the TU Media satellite DMB service, retaining between 20 and 25 per cent of the revenues. The service includes 15 video, 19 audio, real-time traffic information, and mobile shopping channels.
In a market of 40 million mobile users, the national forecast is for 21 million mobile broadcast users by 2012. The balance will be served by regional free-to-air T-DMB services, six of which have launched in Seoul in December 2005. By the end of 2006, the T-DMB user based had reached 2.82 million.
Thirteen local broadcasters have been identified to offer T-DMB in the provinces and the formal licensing process is progressing with the aim of making T-DMB available nationwide by the middle of 2007.
The US is rapidly emerging as a potential power-house in mobile broadcast TV after the decision of AT&T (formerly Cingular Wireless) to follow Verizon in selecting MediaFLO USA as its broadcast network partner. Together, the two largest US operators can target services at more than 120 million users.
Challenging concerns expressed about the viability of mobile broadcast business models, Jeff Brown, Head of Global Strategy and Development, Qualcomm MediaFLO, cited Wall Street analysts Bernstein Research which has recently valued the MediaFLO operation at $3.5 billion. This compares with Qualcomm’s publicly stated intention to invest around $800 million in the venture.
Bernstein’s valuation was based on their forecast 29 million users within five years from the committed user bases of Verizon and Cingular. “This would make MediaFLO the biggest single multi-channel pay TV platform in the world,” said Brown.
Looking to the UK, he saw equally bright prospects. Qualcomm has worked closely on two trials with British multi-channel satellite TV company BskyB. Already wholesaling TV channels for distribution over the 3G networks of Vodafone, Orange and 3 UK, BskyB has a growing presence in the mobile market. This position is likely to be enhanced: BskyB holds exclusive mobile rights for English Premiership football from the start of the new season in August.
With a UK L-Band spectrum auction scheduled for September or October 2006, there is a real prospect of a bid involving the satellite broadcaster. “BskyB currently have 8.2 million subscribers on their fixed multi-channel TV service. We think their mobile TV service will have much more than 8.2 million users.”
Brown advised that mobile broadcast be considered as pay TV rather than a traditional mobile business, and pointed out that “the financial markets understand how multi-channel pay TV business models work and they know what the life-time value of a subscriber is.”
Meanwhile, Verizon Wireless has just launched the first services over MediaFLO. The basic V-CAST Mobile TV package offers eight compilation channels including NBC2Go, CBS mobile, FOX mobile, Comedy Central Nickelodeon, MTV, ESPN for $15 per month. A second $25 per month package includes access to mobile TV and V-PACK which offers unlimited basic video clips and monthly access to the internet.
With continuing medium-term constraints on spectrum availability, the development of broadcast mobile TV in Europe is unlikely to resist the influences of global market forces.