Battles Brew Over Mobile TV

Mobile TV is becoming an emotional issue in Europe, with carriers disputing each other's customer claims in Italy, and major operators challenging European Commission proposals for the adoption of DVB-H (Digital Video Broadcasting – Handheld) as the standard technical platform for mobile TV service delivery.

Italians Squabble Over Subs Stats
In the biggest DVB-H mobile TV market in Europe, Italian mobile operators can't agree on how many subscribers they have.

Last week 3 Italia said it had more than 600,000 subscribers to its DVB-H service, which it launched a year ago. But a Telecom Italia (TIM) executive questions that number. (See Bazalgette's Mobile Dis-Content.) Gian Paolo Balboni, senior program manager for TV and multimedia at Telecom Italia, says there are between 500,000 and 600,000 DVB-H customers in the Italian market in total. "600,000 is the number of phones [3 Italia] has delivered to its shops [not subscribers]. It's a common trick we telcos use."

Telecom Italia Mobile SpA (Milan: TIM) launched mobile TV services over DVB-H in November 2006, says Balboni. A recent report in the newsletter Mobile Media said that TIM only has 10,000 mobile TV customers. A TIM spokesman said that number was incorrect but would not reveal the actual figure.

TIM, Vodafone Italy , and 3 Italia all offer mobile TV services over DVB-H in Italy. TIM and Vodafone have wholesale agreements with broadcaster Mediaset, while 3 Italia has its own DVB-H network, which it developed after it acquired Channel 7 from the Profit Group in November 2005. (See TIM Trials Mobile TV.)

Vodafone also will not disclose mobile TV subscriber numbers in Italy, or any of the other 20 countries where the services are available. "It's pretty early days in Italy," says Sarah Hancy, head of TV and video at Vodafone Group plc (NYSE: VOD).

Such spats expose just how new the European mobile TV market is. Regardless of exactly how many subscribers there are, the point is there aren't very many in Europe right now. At the Mobile TV World Forum in London on Monday, Telecom Italia, Telia Company , Vodafone, and BT Movio (the BT Wholesale mobile TV service) wouldn't reveal any subscriber numbers.

That doesn't mean the market isn't worth anything, though. According to Yankee Group Research Inc. , Europe's mobile TV market was worth €600 million ($800 million) in 2006, and it will grow to be worth €3.3 billion ($4.4 billion) in 2011. Mobile TV in Europe will have a 7 percent penetration rate of active mobile users by 2011, predicts Yankee, of which 70 percent will be "casual" users, which means those that occasionally sample unicast (on demand) content.

Globally, there will be 250 million mobile TV/video users by 2011, generating revenue of €10.5 billion ($14 billion), according to the research firm.

Carriers Rage at Reding
A bigger storm is brewing in Brussels where European Commissioner Vivian Reding has somewhat controversially backed DVB-H as the standard for delivering mobile TV.

That's an issue for many in the sector as the industry is still divided on whether broadcast networks or 3G networks are the best distribution method for mobile TV. (See Reding Rides Into CeBIT.)

BT Movio, which offers a wholesale mobile TV service based on DAB-IP (Digital Audio Broadcast – Internet Protocol), urges the industry to lobby against the EC's proposals. "We need to worry about what the European Commission is doing," says Dominic Strowbridge, marketing director at BT Movio. "[Mobile TV] should have a consumer-led approach." (See BT Unveils Mobile TV, Virgin Launches Mobile TV, and BT, ZTE Team Up.)

Vodafone, which prefers to stream TV content over its 3G networks, says it doesn't see the need to use broadcast networks for mobile TV until more people are using the service and causing mobile network congestion. Vodafone says the only place so far where it has experienced any network overload is in Newbury in the U.K. -- the company's headquarters -- where employees are trying out the service.

"If we see sufficient [usage] peaks then we'll see the need to consider DVB-H," says Vodafone's Sarah Hancy. "If we have big mass market take-up, then a broadcast model might be the way to go."

Other operators disagree with the EC's position just on the principle that some markets should not be regulated. "We need to regulate natural assets, but you can't regulate your way to a [mobile TV market]," says Kennet Radne, vice president, head of content partner management, at TeliaSonera.

— Michelle Donegan, European Editor, Unstrung

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