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With the notable exception of t-mobile, mobile phone operators and broadcasters are clamouring to get into the mobile TV market but is the technology ready and do consumers really want it?

 At the moment most mobile TV is streamed over 2G, 2.5G or 3G networks to mobile handsets. “Unicast streaming” is the most common where a dedicated stream is sent to each user.

It works with the current small number of users but there are capacity problems when large numbers try to stream TV simultaneously and the technology looks unsustainable if mobile TV really takes off. 

Multimedia Broadcast and Multicast Services (MBMS) only works on 3G networks and is more efficient than unicast streaming because it uses broadcast or multicast as a delivery system.
This means that multiple users can be streamed the same content on a single delivery channel.

MobiTV uses this technology to broadcast channels such as CNN, Fox News, CNBC and ABC News Now through Sprint, Cingular and Alltell in the US and 3 and Orange in the UK. MobiTV claim more than 1 million US subscribers paying $10 a month.

This is nearly 30 percent of the 3.7 million US mobile video subscribers in the second quarter of 2006 reported by Telephia, the mobile industry researcher.

MobiTV’s growth is impressive but the total percentage of mobile video subscribers among all mobile users is still less than 2 percent. 

A 2006 US study by Telephia found that less than 10 percent of mobile subscribers wanted integrated TV in their next handset. A European study found more than half of mobile phone subscribers had no interest in mobile TV or video. Interest may seem low but it should be remembered more than 75 percent of consumers expressed no interest in using the internet in the mid nineties. 

Despite the initial success of MobiTV the likely technology winners in mobile TV will be dedicated mobile TV broadcast networks that transmit digital TV signals on different frequencies to those used for voice and data. 

Broadcast mobile TV is still at trial stage in the US and Europe but Asia already has success stories. South Korea hit one million broadcast mobile TV subscribers in June.

There are six terrestrial mobile TV broadcasters supplying advertising supported content and subscribers spend about an hour a day on average watching it. To watch broadcast mobile TV consumers will need to upgrade their handsets and keeping them affordable is a challenge for the manufacturers.

The biggest problem is battery life as the batteries needed for the slimmer handsets favoured by consumers drain in about 30 minutes of TV viewing. If the handsets are too expensive broadcast mobile TV is unlikely to take off quickly and they will need to be priced less than a mid-range PDA according to DataMonitor. 

Once the handsets and broadcast technologies are improved there are still the thorny issues of content pricing and business models. Trials across Europe suggest that consumers are willing to pay around £5 a month for a bundle of channels.

The most popular content is news, sports, music, soaps and documentaries. There is a similar pattern across the Atlantic where for the second half of 2006 Telphia reported that ABC News is the most watched mobile channel with 40 percent market share. The top five channels are the Weather Channel, Fox Sports, ESPN and Fox News. CNN is limited by the number of people who have access but 65 percent watch it when it is available to them. 

Presuming enough consumers do pay for content, the success of mobile TV depends on how broadcasters and mobile operators share the revenues. The mobile operators have traditionally kept a “walled garden” approach where they create exclusive content and services for users.

NTT’s DoCoMo, the Japanese mobile content portal, signs up content providers as “official” sites and shares the subscription revenues with them. They do, however, allow open internet access to “unofficial” sites.

As mobile phones adopt more open internet standards, the walled approach will be seriously challenged. Lack of co-operation between broadcasters and mobile operators can be very costly as a consortium of broadcasters found out when they launched their own free DMB channel earlier this year in South Korea.

The mobile operators refused to provide their subscribers with handsets that could receive the channel as they saw it as a threat to their own subscription services. But mobile operators are newcomers to the world of television and creating new content may be a cost too many after the huge sums they paid for their 3G licenses. 

Mobile operators and broadcasters are finding ways to work together and will have to attract lucrative advertising deals. If they get the price right there will be a lot more TV coming to a small screen near you soon.