Mixed reception

Proclaimed as the 'next big thing' in terms of broadcast delivery, mobile TV is struggling to gain traction.

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By  Administrator Published  March 19, 2008

Proclaimed by many as the 'next big thing' in terms of broadcast service delivery, mobile TV is struggling to gain traction in established markets.

As of early-2008, mobile TV services are a reality worldwide. Vincent Poulbere, a telecoms analyst at market research firm, Ovum, cites figures released by Sweden's Ericsson which estimate that at present there are more than 170 mobile TV services available across the globe, the majority of which are deployed over cellular networks.

Media brands will find themselves compromised commercially if they rely too heavily on network operators to distribute their content. They [telcos] are often too greedy for their own good.

A recent study published by US market-intelligence firm ABI Research suggests that the number of mobile TV subscribers worldwide will grow to 462 million by 2012, driven largely by the expansion of 3G network services.

The study also notes that the Asia-Pacific region is leading the world in terms of mobile TV penetration, with 38 million subscribers accessing services by the end of Q3, 2007.

The proliferation of 3G networks combined with subscriber trends in the GCC market indicates that the region will also prove a major market for mobile TV services.

Mohammed al-Ghanim, director-general of the UAE Telecommunications Regulatory Authority (TRA), recently announced that the TRA had commissioned a consultant to advise it on licensing issues, with a final report expected towards the end of this month.

Exactly what issues the consultant will examine also remain unknown as a TRA spokesman declined to comment when approached by Digital Broadcast. The licence is expected to be awarded later this year, with al-Ghanim noting that it was still too early to estimate a commercial launch date at the time of press.

Little other definitive information has entered the public domain, although speculation from within the industry points toward a launch six months to a year after the licence is awarded.

More notably, sources indicate that the TRA is unlikely to favour one UAE operator over another when issuing the mobile TV licence.

Well-placed sources inside the UAE telecoms industry indicate the country's broadcast-mobile-TV licence is likely to be granted to an independent operator that will in turn lease spectrum to the country's two telcos. Although none of the sources would be drawn on how much the concession might be valued at.

Any prospective broadcasters bidding for the licence will almost certainly have to leverage the customer-service and billing expertise of one, if not both, of the country's 'cellcos', according to sources.

"The broadcast market is a very different commercial beast to the telecommunications sector," one source said.

"Mobile customers expect to be looked after in terms of service support, and that's what an operator can provide."

Such a scenario is not without precedent and has exposed a degree of enmity between the parties involved.

The decision by Germany's Association of State Media Authorities to approve Mobile 3.0, a joint venture between MFD (a German Mobile TV wholesaler) and publishing house Neva Media, as the country's mobile TV operator, raised the ire of the country's main telcos.

The decision prompted a Vodafone Germany spokesperson to bitterly remark: "This decision has thrown the future of DVB-H in Germany into doubt".

At present there is a lack of consensus on how content providers and broadcasters can make mobile television a propelling proposition especially in a fragmented broadcast market such as the Middle East.

Control of advertising revenues has naturally become a central dispute for players involved in developing mobile TV services, given the potential the technology offers in terms of generating new ad-funded business models.

Toby Downes, head of marketing at U-Turn Media, a company that operates Dubai TV's live streaming mobile portal in four countries across the Middle East, warns that subscriber uptake of mobile TV could be hindered by the archaic business models employed by network operators.

"Never before have media companies been so restricted [than on the mobile channel]," he maintains.

Downes also adds network operators are too eager to offset declining voice ARPUs to "incentivise" subscribers.

By distributing their content via a white-label off-portal platform - i.e. independently of network operators - they can leverage their brand equity to maintain subscriber loyalty, according to Downes.

He adds that media companies used to relying on advertising revenues to supplement their cost-control and revenues streams will suffer by teaming with network operators which perceive mobile TV simply as a means of developing new revenue streams.

"Media brands will find themselves compromised commercially if they rely too heavily on network operators to distribute their content. They [telcos] are often too greedy for their own good," says Downes.

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