The great debate

The key challenges facing the implementation of next-generation mobile content delivery platforms in the Middle East were hot topics of discussion at SAMENA's recent 'Beyond Connectivity' industry event in Dubai.
Analysis, Delivery & Transmission
du CEO Osman Sultan.
du CEO Osman Sultan.

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The key challenges facing the implementation of next-generation mobile content delivery platforms in the Middle East were hot topics of discussion at SAMENA's recent 'Beyond Connectivity' industry event in Dubai.

The title of this year's SAMENA Telecommunications Council conference staged in Dubai last month, which was billed as "Beyond Convergence", said much about where telco professionals see the industry going in the next few years.

Indeed, with the convergence of voice and data a given, the industry is now looking at the type of services that will come to define the next generation of mobile devices - and mobile TV is high on the agenda.

Along with topics that included WiMAX deployment, quad-play services and international roaming, mobile TV came under the spotlight at SAMENA's conference. According to Wilson Varghese, president and CEO of Kuwait operator Kalimat Telecom, mobile TV is a massive growth area.

"Content is king: it has to be designed for mobile TV applications. The most important thing is optimization of video. - Wilson Varghese CEO, Kalimat Telecom"

"IDC forecasts that in 2009 one in six handsets will support mobile TV," he explains. Out of 10 subscribers, one will be a mobile TV subscriber."

Varghese argues that several factors are crucial to the success of a mobile TV service. "Subscribers need an all-round performance, in terms of channels, content, switching times, video quality and good coverage, both indoor and outdoors.

It's very important you allocate enough channels. Channel switching is also very important; it should be easy to switch channels just like a normal TV," he continues.

In addition, high quality video and audio and a long lasting battery life will help take-up of mobile TV services. The fact that mobile users needn't purchase a separate device is an obvious, but crucial, consideration.

Operators need to make a delicate balance between these factors. "It's a tradeoff between big-screen and portability, and a trade-off between high-resolution and data rates," he says.

But content is arguably the most important factor. "Content is king: it has to be designed for the mobile TV applications. The most important thing is optimisation of video," Varghese adds.

TV content, whether it is news, sports or music videos, needs to be repurposed for a mobile handset's smaller screen. In addition, specific content can be produced from scratch, delivered into bite-size chunks.

The pervading belief is that people who watch TV on the go don't have the time to sit through a whole 23-minute TV episode. Instead, content providers and operators are looking to four-minute 'mobi-sodes' as the optimal programme length.

Broadcast versus streaming

While streaming or unicast technologies based on 2.5G, 3G or HSDPA can be used to provide interactive TV services and downloads but only to a limited number of users, broadcast technologies allow operators to send a number of channels to an unlimited number of users.

"3G is mainly used for streaming, which is point-to-point technology, meaning that if you have many users around the same cell at the same time, they quickly saturate the network," explains Wejdi Harzallah, vice president, commercial operations, S2M.

"You cannot sustain a very good quality of video and audio when you want to send the information to a large number of subscribers.

"This is in contrast to broadcasting technologies where you actually send the information to an unlimited number of users, and they always have good quality video and audio as long as they are in the field of broadcast," he adds.

However, the two technologies are complementary. Broadcasting technology allows operators to offer mobile TV services to all their subscribers, on a set bouquet of channels. Heavy users may opt for interactive services via 3G, generating more revenue and adding ARPU for operators.

"When you want to download a video clip, for example, that particular download will be done on an individual basis on a 3G network. That's what 3G is very good at," Harzallah says.

Ahmed Bouna, MEA sales director, Nagravision, agrees: "3G services are complimentary to mobile TV through broadcast. For interactive services, you need to use the 3G network. But the two technologies are complementary and definitely don't compete. Unicast may be used to serve the long tail.

Delivery methods

Terrestrial-only networks are a costly proposition for operators in MENA region. From traditional voice services to wireless broadband, telcos are looking at ways to reduce capital expenditure (CAPEX) and operating costs (OPEX), while ensuring ubiquitous coverage.

"The terrestrial solution gives access to the content where the network is deployed, but it becomes very costly to expand that terrestrial network.

The economies of scale are non-existent in terms of terrestrial platforms," says S2M's Harzallah, trumpeting his company's hybrid satellite and terrestrial solution.

S2M will be available across the whole of MENA, from Morocco to Pakistan. The feasibility study was conducted in 2006, with Arabsat signed on as a strategic partner. The service is scheduled to launch commercial services at the end of the year.

S2M stands for 'Satellite to Mobile', and uses a satellite to broadcast content directly to devices, including mobile phones, portable media players or in-car devices. However, a terrestrial network of gap-fillers is also deployed to boost the signal, ensuring strong indoor coverage.

The combination of the two ensures access to the service wherever the user is located. The advantages include coverage and costs.

"When you talk about wide areas of coverage, it becomes a lot more efficient to use a hybrid satellite and terrestrial solution. There are substantial economies of scale because you are sharing the platform between 20 countries and over 40 operators in the region.

The economies of scale are not only in infrastructure, they are also related to content, because you will be able to access content on a regional basis rather than an operator basis or a country basis," Harzallah says.

The business model is mutually beneficial for mobile operators and content providers. Operators will share revenues, focusing on the marketing, distribution, customer care and billing.

"[Establishing mobile TV services] is the best strategy for maintaining ARPU available to operators facing strong competition. - Ahmed Bouna, MEA Sales Director, Nagravision"

They can offer mobile TV as a value-added service to their voice and data offerings. S2M will launch the satellite and assume the cost of deployment, with customers the greatest beneficiaries.

The world's first mobile TV broadcasting service, deployed in South Korea and Japan in 2005, uses a similar hybrid solution. The two countries share one satellite with two beams with specific content for each. According to Harzallah, there are already three million subscribers in South Korea and Japan combined.

Key drivers

The launch of mobile TV services in China is a good example of reaching out to a mass market, with a 300 million subscriber pool. A hybrid solution will be launched in time for the Olympic Games in August 2008.

The terrestrial network has already been deployed in the Olympic cities, and Harzallah says a satellite system "makes the most sense" given the huge geographical area.

China's deployment also gives a good glimpse into what type of content will be the most popular. Sporting events are thought to be the primary channels of choice for mobile TV subscribers. News and music channels should also prove popular.

Anyone in doubt about the potential of mobile TV services need only look at PCCW's example in Hong Kong. Since launching mobile TV services last August, it has seen subscriber numbers soar.

"The attachment rate increases regularly," says Frederick Chui, senior vice president, EMEA, PCCW Global. "At this time 90% of our mobile subscribers also buy mobile TV services. We are seeing more and more monthly subscribers watching mobile TV.

Out of its 13 channels, four of which are high definition, one of its biggest successes comes from its sports offering, Now Sports.

"We have exclusive rights for English Premier League telecasts and have been broadcasting since August last year. In the four months from August to December, our Now Sports mobile subscriber numbers doubled. On average, users watch 400 minutes of content each month," Chui says.

Its mobile music platform is also proving its worth. PCCW's library consists of over 110,000 songs and music videos from 40 top record companies.

In the second half of 2007, more than 5.87 million songs were streamed to mobile devices.

There are many other reasons why the region is ready to embrace mobile TV. Worldwide deployments demonstrate that this is a working technology that enjoys real demand. With penetration by country typically hovering around 100%, there is no shortage of potential subscribers.

"The MENA key markets have something in common: the language," says Nagravision's Bouna. "In addition, many users are young and technology-savvy, there is minimal investment, content is available and new content can be developed very quickly.

With demand already in place, it's the same old story. In a climate of intensifying competition, operators around the world are trying to generate new revenue streams to sustain growth. And judging from the success of their foreign counterparts, mobile TV looks set to debut in these parts.

Bouna adds: "It's the best strategy for maintaining ARPU available to operators facing strong competition.

The first DVB-H deployment in Europe enabled the operator to move their ARPU from $40 to $70, which is amazing - it's the highest ARPU in Europe."

Streaming media opportunities

Costly content

"Mobile-specific content is more expensive to produce per minute than long-form television content," says Karim Sabbagh, partner, Booz Allen Hamilton. "If you were to produce a four-minute programme, it is three times the cost per-minute of producing a 25-minute TV episode."

While this seems prohibitive, operators can recoup the costs from viewership revenue.

"The cost of producing content is almost negligible compared to the cost of building telecom infrastructure," adds Osman Sultan, CEO, du.

Another factor is copyright.

"The ownership of the content has to be dominated by the operator to a certain extent," says Sabbagh.

"Telecom operators should control the rights of the content over telecom networks. [TV broadcast companies] still have the power to do that in the media industry, but they're losing it gradually.

"But operators should also consider working not only on content, but on applications," he added.

 

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