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3G TV: too little, too soon

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Mobile television is the closest the cellular industry has come to the elusive "killer application" for 3G – or so it hopes. Broadcast television to the handset has been the most talked-about application this year, and some operators, such as Sprint with MobiTV, already offer limited services. But the consumer appeal and the suitability of the medium is almost wholly unproven - Verizon Wireless expects to sell only about 130,000 video handsets this year, for instance, despite its vCast television offering.

Most agree that to move beyond short clips and gimmick value, carriers will need to support a separate network based on specific broadcast standards, such as DVB-H (Digital Video Broadcast- Handheld) or Qualcomm’s MediaFlo, which are only at the trial stage.

Despite these uncertainties, such is urgency of the 3G operators' need to increase revenues and ROI from its network, that many are leaping into the market at the earliest stage and with inadequate technology. This risks disappointment with the results of the trials and a tougher job to convince consumers to test the full-blown mobile TV services when they emerge.

Another key question for operators is which business model to adopt for broadcast. To date, all services have been subscription-based, but some are looking to the more traditional broadcast approach of advertising support. The US will soon see the first advertising funded, free-to-viewers mobile TV stations, the Digital Music Video Network, which will launch in June. Viewers have to sit through 15-second advertisements sandwiched between the videos, but then only pay the download fee, with no additional subscription charges.

US cellphone TV services such as MobiTV from Sprint and now Cingular, and vCast from Verizon Wireless, typically cost between $10 and $20 a month.

Telia

Several of the European majors are too impatient to wait for the region’s preferred mobile broadcast standard, DVB-H and are launching services using their own 3G spectrum. This week, Telia in Sweden said it would offer broadcast TV, initially local news service TV4 and the Voice TV channel, to all its 4m subscribers, with a free trial period until the end of August.

Like T-Mobile in Germany, Telia originally focused on TV services geared towards major events – the European Football Cup in T-Mobile’s case, the Olympic Games and Eurovision Song Contest in Telia’s. Telia claims these early experiments had very good response and have stimulated demand for a more general service, but there is a great difference between short, timely clips from a topical event and an ongoing broadcast. To use the Telia service, users need Telia SurfPort installed on their phone and a handset capable of video streaming.

Orange

Also this week, Orange – which will trial a DVB-H system next year - launched a nine-channel mobile TV service in the UK, with a £10 per month subscription charge. Orange’s TV channels include ITN News, CNN, Cartoon Network and extreme sports and special channels devoted to the reality shows Big Brother and Celebrity Love Island. All of the channels will be streamed over the Orange 3G network and are available through the new Orange TV section on Orange World. Customers need to be in 3G coverage to use the service and Orange is using the MobiTV platform like Sprint.

Orange TV will initially be available on the Nokia 6680, with further handsets to follow throughout the year. Customers simply download the TV application for free from Orange World, then pay a subscription of £10 per month to watch the channels. Orange is already offering 23 TV channels over mobile phones in France. Other companies in the UK are only offering on demand programming over their 3G networks, but 3G-only operator, Hutchison-backed 3, said it will also offer its subscribers the chance to watch live action from Big Brother on their handsets this summer.

Vodafone is expected to follow suit soon but O2 plans to wait until it can offer a full DVB-H service, which it will trial in Oxford, with cable company NTL, from July. As in other areas, O2 is taking the line that it will launch services more slowly than some rivals, but when the market really wants them and the technology can deliver a good experience. In the case of television, its caution may well prove highly justified.

Copyright © 2004, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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