Mobile Television: An Overview

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Mobile Television: An Overview

Patrick Pfeffer

September 26, 2007

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Content

1. Market Potential

2. Regulatory Issues

3. Technology Options

4. Current Deployments

5. Conclusions

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Mobile TV trend-scoutingMarket Potential

The RGU market for mobile TV is much larger than for fixed IPTV due to the large number of video capable mobile devices.

Mobile TV Subscribers by Region©TelecomView 2007

0

70

140

210

2005 2006 2007 2008 2009 2010 2011

Millio

ns

ROW

Western Europe

North America

Asia-Pacific

Global TelcoTV Subscribers©TelecomView 2007

0

25

50

75

2006 2007 2008 2009 2010 2011

Millio

ns

Asia Europe North America ROW

448406

361309

249

1,107

808

528

306

157

2006 2007 2008 2009 2010

3G Subscriptions (in M)

DSL & CableSubscriptions (in M)

Number of DSL/cable line

Number of 3G or video ready phones during the next

+16%

+63%

Bob’s

Estim

ates

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Mobile TV value innovationMarket Potential

Like for IPTV, customers are not asking for mobile TV. Operators must demonstrate value/price ratio to market.

Value Proposition through innovation

Content

Download Streaming

On-demand Carousel Non-live Live

Pay TV program Video on-demand Push and store Clips

Subscription Free TV program

Enterprise

Mass market

Value Creation through content segmentation

Core Requirements

The service must be available outdoor, indoor and in moving vehicle

Public channels and pay channels are a must, special channels desirable

Radio must be available

Wide coverage (urban, suburban and main roads)

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The gray zoneRegulatory Issues

Pressure points

All regulatory bodies are playing catch up with technology and early entrants are fighting awkwardness of obsolete regulations. There are regional differences.

Spectrum

Allocation and acquisition of scarce frequencies difficult in specific markets

Different regulatory bodies in geographical markets (even within same country e.g. Germany)

Some countries demand proprietary standards for broadcasting (e.g. China).

Content

Regulatory issues concerning unicast content (e.g. VoD) vs. broadcast transmissions

Public vs. commercial broadcasting

Digital Rights Management issues regarding distribution, protection and royalties for copyrights

Protection of consumers

Commercial

Free to air networks might prohibit charging for service (e.g. South Korea)

Coverage requirements might forbid profitable network rollout

Non discriminatory conditions between different distribution platforms

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Broadcasting technologies landscape – DVB-H standard gains momentumTechnology Options

Broadcasting technologies – key facts

DVB-H

Digital Video Broadcasting

Handhelds

T-DMB

TerrestrialDigital Multimedia

Broadcasting

S-DMB

Satellite Digital Multimedia Broadcast

MBMS

Multimedia Broadcast Multicast Service

MediaFlo

Media Forward Link Only

Region Europe, USA, Australia South Korea South Korea, Japan Europe, South Asia USA

Download Rate Up to 11 Mbps Up to 1 Mbps Up to 2.3 Mbps Up to 0.38 Mbps Up to 11.2 Mbps

Video Codec MPEG-4 MPEG-4 MPEG-4 MPEG-4 MPEG-4

Channels/128kbps 60 3-5 9-27 3 50-70

Cell Size 17-40km 40-60km 3-700km 2-3 km 2-10km

Power Reduction Time slicing Bandwidth shrinking Bandwidth Shrinking Time slicingTime division multiplexing

Transport stream MPEG TS, IP MPEG TS IP IP MPEG, IP

Frequency VHF, UHF, L-BandVHF band III

1,452 to 1,492 MHz2.6Ghz 174 to 230 MHz,

470 to 862 MHz716 to 722 MHz, 698 to 746 MHz

CAPEX

Out of the large range of cellular, terrestrial and satellite broadcasting technologies, some of them are emerging as standards in different regions.

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Mobile TV devicesTechnology Options

Outstanding issues

The challenge here is to find the balance between device cost, performance, form-factor and style depending on the target customer segment.

Battery Technology and power management are two crucial aspects to determine the success of Mobile TV.

Integration of new DVB-H, DAB or DMB tuners and channel decoders represents a significant challenge both in terms of energy consumption and components costs.

Application processors, RAM memory, GPS chipsets, large and high resolution colour displays are vital for high quality of service and end-user acceptance.

Ease of use and large choice of different mobile TV ready handsets are essential for the momentum market take-up

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Status quo in early adopters marketsCurrent Deployments

In a nutshell

Mobile TV market dynamics are heavily influenced by geographical characteristics and respective regulatory frameworks.

Market split between Video on demand subscribers and Mobile TV services

MobiTV content aggregator approach is a success story

Mobile TV over WiMAX is talked about for 2008

USA

Regulatory muddle due to federal system

Digital Right Management issues (GEMA)

European Commission initiative promoting DVB-H

Germany

Pitfalls of MBCo: no alliance with mobile operator, purpose built devices, distribution strategy

ISDB-T standard used for One

Seg Service, no charging allowed by regulator

Japan

DVB-H is predominant, take-up push by FIFA World Cup 2006

High pricing with early adopters

Wholesale approach by Mediaset to serve mobile carrier

Italy

Source: DETECON Research and Analysis

Struggle between paid service and free of charge scenario

Pricing and handset affordability is a concern for user acceptance

Wholesale approach with 25% revenue share for mobile carrier

South Korea

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H3G acquired Channel 7 thus owning its own DVB-H license. H3G has been the first MNO offering Mobile TV and interactive services

TIM and VOD signed wholesale agreements with Mediaset. Mediasets’ channels can be viewed by both TIM and VOD UMTS/DVB-H subscribers

Two players: H3G (vertically integrated) and Mediaset (wholeseale) Mobile TV offering to pre- and post-paid customers 20 channels available Pricing options: daily (3€), weekly (10€) or monthly (10€) basis Both Mobile TV platforms enable basic interactive services:

Channel subscription, ring tone download, and voting

Interactive platform is a proprietary solution, lack of standards DVB-H/UMTS integration enables a seamless interactive services Technology enables service subscription on handset Both DVB-H MUX cover 75% of country (outdoor)

Technology Market Success

High penetration of 3G (EY 06): 21M H3G Mobile TV subscriber (including sporadic

users (Mid 07): 500K TIM/VOD subscribers together (Mid 07): 100K

Player

Product Description

logo

Interactive Services

Intense marketing campaigns MNOs want to merge IM-TV with existing UMTS

based video services and further develop basic interactive services (e.g. betting, shopping, etc.)

Strategy

H3G Mobile TV w. channel subscription service

Voting at Mediaset

Current DeploymentsItaly

With 600K Mobile TV subscribers Italy is the most developed European market. There are two mobile broadcast networks. Interactive services are in infancy.

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MFD signed content partnerships with ARD, ZDF, MTV and Pro7Sat.1

Partnership with Mobile Service Provider: Debitel, Victor Vox, others. Together they amount 25% of all mobile subscribers in Germany

No partnering with MNOs (TMO, VOD, O2, EPL)

In 06 Mobiles Fernsehen Deutschland (MFD) has launched the first broadcast based Mobile TV service

Channels: ARD, ZDF, MTV, N24, a Pro7Sat.1 and a visual radio station

Limited interactivity: ESG, sent-in MMS as visual radio message, ring tone and music download (both BigFM), WAP based services (IFA show case)

Trial: Mobile soaps with SMS as reminder and content-elements

MFD uses DMB, broadcast technology based on DAB Technology enables WAP based backchannel integration MFD holds a nation wide L-Band license Coverage only in large metropolitan areas; 16 Mio. potential users


Watcha Subscriber (Estimate): 7,800 (YE06) Monthly flat rate differs between 5 € and 10 € Revenue sources: Service subscription,

advertisement and user interaction

Player

Product Description Interactive Services

MFD is positioning itself as a technology independent Mobile TV platform operator

In competition to a consortium of TMO, VOD E-Plus and O2, MFD also pursues a DVB-H Mobile TV license

Strategy

Watcha Mobile TV offering

Sent-in MMS as visual radio message

Current DeploymentsGermany

Watcha is the first broadcast based Mobile TV offering in the German market. It features only limited interactivity.

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TU Media (broadcast service company, SK Telecom owns 30%) operates the country’s S-DMB network

TU Media aggregates content and simulcast cable content 25% to content owners and 25% to MNOs

Pay-TV only (thus threatened by free T-DMB based Mobile TV) Large variety of channels: Music, news, lifestyle, economy, traffic,

local YTN, 1to1, U1 Media (channels), Content: 75 % video, 25 % audio One-time connection fee ($20) and usage-dependent content fee

(ARPU $20).

Geostationary satellite-based DMB, amplified via about 6000 repeaters in inaccessible areas

Operate in 2.6GHz Repeaters work with Ku-Band at 12GHz


Launch in May 2006, 1 Mio customers in Nov 06, Forecast: 6,6 Mio user in 2012

Still fast growing, but less than T-DMB, Total Revenue DMB 2007 forecast): € 240 Mio

High-priced handsets, questionable user exp.

Player


KT telecom service using WiBro and DMB – users will be able to retrieve information through WiBro in the background and display it on the screen (e.g. with Samsung M8000 + extra receiver )

Usage of Mobile TV popular in metropolitan areas for commuters, but limited to cell phones (larger variety at T-DMB possible)

Average viewing time/day 62min (average world: 15-20 min, average Europe: 2-3 min)

Strategy

Current DeploymentsSouth Korea

Satellite-based DMB is threatened by free accessible T-DMB. Combination with WiBRO for interactive services.

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Korea Telekom holds DMB license, runs network and defines channel portfolio (e.g. KBS, MBC, SBD, etc)

MNOs take advantage of free DMB service and sell handsets Content providers (e.g. KBS, MBC) broadcast their channels free

Service is free (Regulator) Revenue to be gained via customer retention in other offerings Service usage: automotive devices (50 %), USB-Devices (30 %),

mobile phones (20 %) Seven DMB-TV channels, 13 DMB-Radio channels, eight data

services (JPEG Slide Show, Dynamic Labeling, Wireless Service, Traffic Service)

Domestic technology based on the DMB standard used by DTT and satellite broadcasting throughout Europe and Asia

Runs at 12MHz (10 times more capacity than Germany’s MFD)


Launched in 2006, already 0,6 Mio users after four months

Forecast: 4 Mio users EY 06, 13,9 Mio in 2012 Total Revenue DMB (2007 forecast): € 240 Mio

Player


Usage most popular while commuting or at work/school

Fast growth, but not profitable yet Many type of devices available

Strategy

Traffic information

service on a PDATraffic information service via DMB

Current DeploymentsSouth Korea

Fast growing terrestrial DMB Mobile TV with free access shows high growth rates. Some interactive services.

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Qualcomm owns the spectrum, runs the MediaFLO broadcast network and provides the service on a white-label basis

Verizon purchased the MediaFLO service and integrates it into its overarching “V Cast” mobile entertainment platform

V Cast is a 3G network created by Verizon, used for broadcasting Mobile TV channels, video clips and music (e.g. CBS Mobile, Comedy Central, Fox Mobile, MTV, NBC, NBC News, Nickelodeon, etc.)

Video content: Music, Showcase, Comedy, News, Weather, Entertainment, Sports, Net’s Best (e.g. You tube)

Features: Channel surf with no buffering, intuitive program guide, text reminders for favorite shows, call taking without interrupting program

Verizon’s V Cast service integrates unicast and broadcast technology

Verizon Wireless’ Third Generation Wide Area 1XEvDo network Data transmission at speeds of 400-700 Kbps and bursts of up to

2.0 megabits per second


Commercial launch: March 2007 V Cast service costs $15/month (basic package)

or $25/month (select package) with unlimited basic video clips, access to mobile Web 2.0, unlimited airtime and email); limited package $13

Player


Pull strategy: Offering of popular channels attracts customers to services

MediaFLO signed a Mobile TV wholesale agreement with Cingular

Available in 35 states

Strategy

Entertainment and weather on VCast

Current DeploymentsUSA

Verizon markets Qualcomm’s MediaFLO broadcast Mobile TV service. It enables very limited interactivity.

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MobiTV owns the service, defines portfolio and delivers the app MNOs (Sprint, Cingular, Midwest Wireless, nTelos, US Cellular,

Cellular South) have signed wholesale agreements with MobiTV

Service offers both live streaming and on-demand video clips Mobile TV available in English and in an English/Spanish version Service offers more than 10 popular channels (e.g. MSNBC, ABC,

CNN) Several interactive features: Interactive advertising, Interactive M-

Commerce (e.g. purchase ring-tone or ticket), Interactive Content Rating, Voting, Sharing & Community

MobiTV supports multiple 3G network technology and hardware systems

Compatibility includes several cell phones (Nokia, Motorola, Samsung Sony Ericsson etc.) and smart phones


More than 1 Mio subscribers Fees vary depending on vendor

Player


Pull strategy: Offering of popular channels attracts customers to services

MobiTV is likely to sign agreements with further MNOs

Strategy

Sports and news on MobiTV

Current DeploymentsUSA

MobiTV is a 3G Mobile TV service predominantly available through Sprint and AT&T. Many interactive features available.

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Conclusions

Many technologies

Handset drag down

Various business models

Cannibalization of IPTV ?

Customer demand fallacy

Content might not be too complicated

Mobile TV + 2/3G services

Part of the bundle

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Contact

Integrated management and technology consulting worldwide

Patrick Pfeffer

Detecon Inc.400 S. El Camino Real, Suite 500San Mateo, CA 94402Phone +1 650 401 5222Fax +1 650 401 5298Mobile +1 707 971 [email protected]