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Mobile Operators Unite in TV License Bid

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
8/15/2007
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On Monday, T-Mobile International AG , Telefónica O2 Germany GmbH & Co. OHG , and Vodafone Germany cleared a major hurdle in their bid for a national DVB-H license in Germany, when the federal competition authority approved the operators' mobile TV joint venture.

The three mobile operators are clubbing together to get their hands on a national license to offer mobile TV services. Germany will be one of the first big European markets to issue a mobile TV license using the digital video broadcasting-handheld (DVB-H) standard since the European Commission officially backed the standard last month. (See Reding Riles Mobile TV Players and EC Backs DVB-H.)

If the joint venture is successful in winning the DVB-H license, the operators will form a separate company dedicated to acquiring content and building a mobile TV service delivery platform. But the operators will market their mobile TV offers individually and compete on services.

The operators say they are also considering a wholesale model whereby other service providers can use their platform.

But the operator joint venture will not actually build the DVB-H network. The right to build and operate the network will be authorized by the Germanpublicutilitiesregulator, Bundesnetzagentur (BNetzA) , in a separate license. The operator joint venture is not applying for that license.

By pooling their resources and not taking on the expense of building the network, the operators are aiming to get into DVB-H as cost effectively as possible.

"We would like to minimize costs and help each other with our know-how," says a T-Mobile spokesman.

The new joint venture will also be in a position to negotiate better deals for content and devices, than if the operators were going it alone, according to Ovum Ltd. principal analyst Eden Zoller.

"Their combined bidding power when it comes to sourcing content is pretty strong… [in addition to] their bargaining power on the devices side," she says.

The licenses will be awarded by "beauty contest." The winners of the licenses -- one for running the network and one for broadcasting content -- will be announced this autumn, but could come as early as the end of this month, according to a Reuters report.

The mobile operator joint venture is competing with broadcasters such as Premiere, ProSiebenSat.1, and the RTL Group, for the broadcast license. The cost of the license is not known.

The aim for all the parties involved in Germany's DVB-H ambitions seems to be to get a network up and running in time for the UEFA (Union of European Football Associations) European championship, which will be held in Austria and Switzerland in June next year.

"The Euro Championship and the Olympic Games are definitely drivers for DVB-H," says a Vodafone Germany spokesman.

The Vodafone man explains that, while its mobile TV offer over its 3G network has been "very well accepted by our customers, for future development you need a true broadcast technology."

None of the operators would reveal how many mobile TV customers they actually have. (See Battles Brew Over Mobile TV.)

While the cartel office approved the formation of the joint venture, there are still some competition concerns that need to be addressed. According to a spokesman at the German cartel office, the companies need to propose certain "commitments" to ensure there is no infringement of competition in the other areas of the operators' businesses. Final approval is due at the end of September, says the spokesman.

— Michelle Donegan, European Editor, Unstrung

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