Many mobile TV broadcasting options will not be financially viable

: Analysys:

• Consumers are unlikely to spend a substantial amount on mobile TV and radio services, severely limiting the options that are financially viable

• For small operators sharing a DAB-IP or DVB-H broadcasting network with a number of other mobile operators will be essential in order to achieve adequate financial returns,

• Large operators could have their own broadcasting networks, and TDtv could prove cheaper than DVB-H

• Report models the financial return from mobile broadcasting deployment options for operators considering mobile TV and radio technologies such as DAB-IP, DVB-H, T-DMB and TDtv

Despite high expectations for mobile TV and radio services, only a small number of broadcasting technology options will be financially viable, .

As consumer demand for mobile TV and radio increases and broadcasting services begin to emerge during 2006, there will be strong competitive pressures on mobile operators to respond. However, There is a strong chance that mobile users will not spend a substantial amount on mobile TV and radio services, or video-on-demand and other mobile broadcasting services.

Mobile operators in Western Europe are already evaluating several broadcasting technologies, including DAB-IP (Digital Audio Broadcasting - Internet Protocol), T-DMB (Terrestrial Digital Multimedia Broadcasting), DVB-H (Digital Video Broadcasting - Handheld) and TDtv, alongside the option of relying on enhanced 3G networks. If they opt for a dedicated broadcasting technology, they must decide whether to build their own networks or to share the cost and risk with other operators and/or broadcasters.

Financial modelling presented in the report reveals that small operators will have a very limited choice of viable options. Sharing a broadcasting network with a number of other mobile operators will be essential. With a shared network, either DAB-IP or DVB-H could yield attractive returns. While DAB-IP is potentially the cheapest solution, it is only appropriate in those few markets where DAB has been deployed extensively. Furthermore, only a limited range of DAB handsets and broadcast channels may be available. DVB-H is currently attracting the most interest from mobile operators in Western Europe and is the most likely to achieve significant economies of scale on both infrastructure and handsets.

Mobile operators with a large customer base have more options than smaller operators. While a shared DAB-IP or DVB-H network could provide a strong financial return for a large operator, some may want their own broadcasting networks, to differentiate themselves from competitors.

Mobile operators wanting to own broadcasting networks have two viable options: building DVB-H networks or upgrading their 3G networks to TDtv. TDtv would allow mobile operators to reuse existing cellular base stations and operate in already-licensed TDD (Time Division Duplex) spectrum, making it considerably cheaper. While DVB-H is also viable, operators must try to avoid high spectrum costs and the use of the more expensive L-band spectrum, which would require significantly higher take-up and revenue per service user to achieve a good return.

Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe Publ 20060628