Operators eye cash cow in mobile TV

Mobile TV, or video viewed on mobile handsets, is seen as the next big revenue generator for the mobile communications industry. Although the sector is still in its infancy Vivian Reding, the European information society commissioner, has quoted figures which put the potential value of the sector at €20 billion in 2015 with 200 million Europeans regularly watching mobile TV on their handsets.

A report by industry analysts Berg Insight has been even more bullish, estimating a market worth €32 billion by 2012 and with 50% of all mobile phone users watching mobile TV content, up from the current level of 15%. With operators’ facing pressure on revenues as the cost of calls and roaming charges falls, income from mobile TV will be an invaluable revenue stream in the coming decade.

The range of content available at present is relatively limited and tends to be restricted to short video clips, games, sports and music videos. The average length of time users watch TV content on their handsets is seven minutes, according to Gerrit Jan Konijnenberg of the Mobile Entertainment Forum, a newly formed association which represents Swedish telecommunications company Ericsson and Dutch television production company Endemol, the inventor and owner of the Big Brother reality show format.

While the short format dominates the market at present, moving away from the current trend of "snacking" on mobile content, Konijnenberg believes that viewing time will increase as broadcast quality improves and handset battery life is extended.

Despite the limited take-up of mobile TV by mobile phone users, there is already a significant amount of content being specially made for mobiles.

But some analysts believe that there will not be a major breakthrough in usage until mobile TV content matches broadcast quality which may take until 2012. By then the industry will have to have decided which of the current competing platforms and technologies becomes the standard in the same way that the adoption of the GSM standard fuelled the explosion in mobile phone use and the triumph of the VHS video format killed off Betamax. Naturally opinions vary over which of the competing technologies should lead the way forward. The four main rivals are 3G MultimediaBroadcast/Multicast Service (MBMS), Digital Video Broadcast Handheld (DVB-H), Digital Multimedia Broadcasting (DMB) and MediaFlow. MBMS can run over existing 3G networks while the other technologies require new networks. Despite MBMS’s headstart, some industry analysts argue that the 3G system is fine for unicast services, ie, where individual users request a video clip, but it will not have the capacity to support multicast services where many users link to the same broadcast or to cope when the quality of mobile TV services is improved to broadcast standard. Many 3G networks are, however, being upgraded to address bandwidth issues.

In a speech to the CeBIT technology fair in Hanover on 16 March, Reding stressed the importance of widely recognised open standards to achieve economies of scale and fuel rapid consumer take-up. She said she was prepared to give strong support to standardised European solutions such as DVB-H provided there was certainty and technology licensing terms and conditions.

In the CeBIT speech, Reding also highlighted another major issue for the development of the mobile TV market, the management of radio spectrum. The switchover to digital television transmission by 2012 will free up a substantial part of the spectrum - the space broadcasts are transmitted - to other services. But there are wide differences among member states over the rate at which they are reallocating parts of the frequency band and the transmission capacity of the frequencies being allocated.

GSM Europe, which represents mobile phone operators, has called for spectrum frequencies to be made available as a "matter of urgency in order to launch [mobile TV] services as soon as possible", in particular by allocating part of the UHF band which carries most television broadcasts.

"We are at a crucial point in time. The market window is open now, spectrum can feed the evolution of exciting services and innovative technical solutions," says Kaisu Karvala of GSM Europe.

Reding also drew attention to the fact that many national telecommunications regulators have not addressed the issue of mobile TV, saying there was a risk of a "legal vacuum which would be detrimental for growth and jobs in Europe".

While the potential for mobile TV is clear, it is equally apparent that there are a number of regulatory and technical issues which need to be resolved before mobile phones become mini-televisions in users’ pockets, in the same way that handsets have almost replaced cameras for taking quick snaps.

Mobile TV, or video viewed on mobile handsets, is seen as the next big revenue generator for the mobile communications industry. Although the sector is still in its infancy Vivian Reding, the European information society commissioner, has quoted figures which put the potential value of the sector at €20 billion in 2015 with 200 million Europeans regularly watching mobile TV on their handsets.