Competing technology standards, political manoeuvrings and the emergence of new delivery platforms continue to impact the development of mobile TV services or the 'third screen as it is dubbed by broadcasters. Ronan Shields investigates.
Mobile TV has long been touted as the next 'killer app' in the telecommunications sector, with many claiming it has the potential to bolster flagging revenue streams for both mobile network operators and broadcasters.
Dubbed the 'third screen' by industry players, the progress of mobile TV services has struggled under the weight of technological and regulatory standards which have thus far hindered it from achieving mass-market acceptance.
The European Union's recent endorsement of DVB-H has led many industry observers to predict the technology is primed to become the universal platform for the delivery of digital content to end-users worldwide.
However, there have been rumblings of discontent about the technology among European service providers in recent months, largely relating to the platform's cost of implementation.
Complicating matters further is the fact that US chipmaker Qualcomm, whose MediaFLO platform was recently endorsed by the US government as the country's mobile TV platform, is also eyeing expansion into international markets.
DVB-H struggling for traction
European DVB-H advocates often point to the success of DVB-H deployments in Italy as a demonstration of the commercial potential of the technology.
Figures recently released by 3 Italia, one of Italy's biggest DVB-H platform operators, suggest that the average revenue per-user (ARPU) generated by DVB-H service subscriptions is 60 percent higher than that of voice subscriptions.
However, Paul Goode, senior analyst and vice president of market intelligence firm, M:Metrics, claims mobile TV subscription retention rates in Italy are waning.
Goode is not alone in this assertion. David Percival, a director and telecoms and media expert at global consulting firm PRTM, also noted that DVB-H service cancellations outnumbered new subscriptions in the Western European country.
Adding fuel to the fire is industry speculation that suggests that Finnish infrastructure and handset giant Nokia withheld the launch of DVB-H-compatible handsets in its domestic market in December 2007.
Speculation from industry sources intimates that Nokia was wary of the impact any potential commercial failure could have on its business, given that Finnish broadcasters were struggling to source content for the DVB-H mobile TV service at the time.
It is worth noting however, that not all operators in Europe are questioning the commercial viability of the platform.
Similar to the glut of European mobile TV launches in the build-up to the 2006 FIFA World Cup, Dutch pan-European operator KPN will introduce its own DVB-H services in Holland ahead of this summer's two biggest international sporting events, UEFA's Euro 2008 and the Beijing Olympic Games.
Mobile operator Swisscom also launched a DVB-H service last month in a bid to cash in on the expected demand for sporting content from cellular service subscribers.
KPN executives recently revealed that the company had withdrawn its 3G mobile TV streaming offering after service quality issues led many users to either cancel their subscriptions or churn to a rival network.
They also confirmed that the company was considering investing in a standalone DVB-H network, arguing that it could provide operational gains outside its core network services such as voice and other data offerings.
Jerry Rocha, senior director of mobile media and advertising at Nielsen, argues that inflated access price scales are discouraging mobile service subscribers from taking up DVB-H services.
Rocha also argues that DVB-H service providers should heed the reasons for the steep decline in subscriber numbers in recent months in certain European markets.
"Business models in this sector have not evolved as predicted two years ago," he says.
NextWave Wireless CTO Mark Kelley claims that his company's TDtv solution offers efficiency gains to third-generation cellular service providers as it operates using spare spectrum from their 3G allocation.
According to Kelley, this saves network operators from having to purchase costly additional spectrum from regulators. "There are no incremental costs so it's extremely efficient," he reports.
3G network operators have invested significant funds in gaining their licences, accordingly to Kelley, who adds that over-regulation in many mobile markets has meant that mobile TV is "the best commercial telecommunications service currently available that remains largely unexploited".
With pan-European mobile operators Orange and T-Mobile currently conducting trials of NextWave Wireless TDtv technology, the US company may still emerge as a serious contender in the mobile TV market.
Media masters missing the boat
Franklin Selgert, senior innovation manager at KPN and BMCO Forum board member argues that major media organisations must bear some of the responsibility for the failure of commercial DVB-H deployments in developed markets.
The basic thinking is very simple for Selgert: "The TV broadcast industry is no place for fragmentation," he says. He maintains that the business case for mobile TV is suffering due to the nascent nature of the industry and the relatively techno-phobic nature of media companies.
Selgert asserts that media companies would do well to observe how mobile network operators are working with vendors to develop new user-friendly DVB-H handsets and lobby regulatory bodies.
"If media organisations worked with us we could lobby for greater uniformity in terms of standards," he insists.
Opportunities in emerging markets
To ensure successful deployments in emerging markets, telcos must work with local content providers, claims industry analyst Informa Telecoms & Media.
One such service provider to adopt this strategy is Vodafone Egypt, which recently reported that more than 70 percent of content - including mobile videos - downloaded from its Vodafone Live portal is provided by local content aggregation partners.
Informa maintains that a greater degree of cooperation between content providers and mobile operators is required to successfully exploit the commercial opportunities available, particularly in Ã¢â‚¬Ëœemerging' markets such as the Middle East.
Another challenge facing telcos and media companies operating in these markets is tackling the high proportion of prepaid subscribers who often use unregistered SIM cards.
An additional hurdle for the uptake of mobile TV services is that subscribers are often unable to input the correct settings on their handsets thus preventing them from accessing and using mobile TV services. This is a result of most emerging markets telcos not subsidising their subscribers' handsets.
Many consumers in these markets source these devices from independent channels, meaning emerging market telcos cannot keep track of handsets accessing their network services, unlike their European and North American counterparts.
The prospect of broadcasters operating in emerging markets tapping free-to-air (FTA) mobile TV technologies has become a very real proposition. FTA services are becoming increasingly popular in the emerging markets of South East Asia, for example.
US-based mobile TV chipset maker Telegent Systems recently published a report which claimed that consumers were more likely to access free, or heavily-subsidised, mobile TV services.
This proposition might even make in-roads into the developed markets of Western Europe and North America, according to industry insiders.
Telegent president and CEO Weijie Yun is eager to point out the comparative performance of pay-TV services, such as DVB-H, and Telegent's proposition, which supports both free-to-air and premium services.
He compares the shipment figures of Telegent's CMOS mobile TV receivers in mid-2007 to the success of DVB-H deployments.
"Inside six months we shipped more than five million units," he claims.
"By comparison, there are only 1.2 million DVB-H subscribers in Italy, more than two years after the launch of services in that country.
"What this survey says to me is that consumers are willing to watch advertising-supported mobile TV that they access for free," he adds.
It is worth noting that 70 percent of respondents to the survey, which was conducted in China, reported that they earned less than $250 per month. Furthermore, only seven percent of those surveyed were women. Yun believes this has a lot to do with the handsets the chipsets were embedded into.
"Men are also typically early adopters of new technologies, which could further explain the skew," he says.
The findings do however paint a positive picture for the future commercial prospects of free-to-air mobile TV services.
At the launch of the survey in August 2007, 56 percent of respondents tuned in to the mobile TV service for 10-minutes on average daily, but just six months later, 49 percent were accessing services at least 30 minutes each day.
Overall, 88 percent of respondents said they were happy with the quality of the mobile TV service, while 60 percent said they would recommend the service to others.
"Ultimately, we were pleasantly surprised by the outcomes of the report," says Yun.
Other findings included the fact that 74 percent of respondents thought the mobile TV service "useless" at the beginning of the survey period, with only 10 percent believing the same at its conclusion.
The percentage of respondents who tuned in to the mobile TV service at least five times each week rose to 54 percent, up from 36 percent at the start of the survey.
Yun adds that five wireless network operators are currently negotiating with Telegent for the purchase of the company's next-generation mobile TV-enabled devices, which he expects to be commercially available later this year.
By fostering relationships with mobile handset vendors, media companies could yet bring their services to the third screen, as free-to-air chipsets effectively turn handsets into a small TVs.
This could effectively allow them to demand a greater share of revenues from advertisers, although a major change in the latter's mindset is required if telco sources are to be believed.
At a recent mobile TV industry gathering in London, one industry source pointed to the Japanese and Korean markets where free-to-air mobile TV services have reached critical mass in terms of subscriber adoption.
"While mobile TV services in both markets do not generate any extra revenue [in terms of premium services] they boast almost 100 percent penetration," the source notes. "If you cannot make extra money with figures like that then you might as well quit the business."
Recent M:Metrics data detailing mobile media usage in the European markets of the UK, Germany, France, Italy and Spain, during the first quarter of 2008 note that a paltry one percent of all cellular subscribers surveyed during the period accessed mobile TV services.
Furthermore, less than 10 percent of respondents who subscribed to unlimited data, i.e. those that can download unlimited data to their handsets for a fixed monthly price, accessed mobile TV services during the same period.
The company's analysts also estimate that mobile TV subscribers continued to stagnate at a little under 100,000 from 1Q07 to 1Q08 across the surveyed markets.
In contrast, mobile data download rates in emerging markets such as China, continue to grow exponentially, driven largely by the massive uptake of cellular service subscriptions.
Chinese cellular subscriptions rose to 584 million in April, up a massive 8.5 million on the previous month's figures. The country recorded an increase of 9.5 million in February, its single biggest monthly increase.