Mobile TV rivals line up for battle

The battle to bring mobile TV to a phone in your pocket is hotting up.

The battle to bring mobile TV to a phone in your pocket is hotting up.

The bewildering array of new technology on display at mobile phone industry conference 3GSM in Barcelona this week revealed the huge levels of investment by industry giants to grow revenues.

And it looks certain that the introduction of digital mobile TV will be a key battleground for the big players in the global telecoms industry.

Among the moves, Virgin Mobile announced a deal with telecoms group BT and software giant Microsoft to launch digital TV on mobile phones, which is set to be introduced in the UK as early as this summer.

The deal will see five channels and more than 350 radio channels broadcasting 24 hours a day via the existing digital audio broadcasting (DAB) network.

Virgin Mobile will be the first mobile operator in Europe to provide digital and TV radio content.

Meanwhile the development of a separate Digital Video Broadcasting-Handheld (DVB-H) system has also seen several telecoms and technology giants join forces to attempt to create the next boom in handset sales and services for mobile phones.

Sony Ericsson and Nokia revealed this week that they planned to co-operate on the DVB-H platform, which can deliver up to 50 digital mobile TV channels, from this year.

It follows a deal last month in the US which saw Motorola, Nokia and Texas Instruments agree to form the Mobile TV Alliance to develop DVB-H.

But with the cost of the new service likely to be around £10 (€14.60) a month, will subscribers be prepared to pay to watch mobile TV?

Despite the hype surrounding the launch of digital mobile TV, the spectre of 3G looms large over the telecoms industry.

In the five years since the launch of 3G, European mobile operators poured billions of dollars into licences for third generation technology to provide high-speed multi-media services.

Firms such as Vodafone, in partnership with BSkyB, already offer mobile TV via the 3G network.

But problems with the technology and a lack of consumer demand have seen firms struggle to make 3G a success.

John Delaney, principal analyst at Ovum, said mobile operators were now looking to recoup investment on 3G through new services such as mobile TV while handset manufacturers see the technology as a way to encourage a fresh boom in sales.

He said Virgin’s decision to use the DAB network rather than 3G or DVB-H would provide a cheaper and quicker but less comprehensive service.

He added: “It is becoming clearer that what is catching the industry’s imagination is providing TV on mobiles.

“Yet what is less clear is what people will be prepared to pay for it.

“It is still a moot point over whether mobile operators will be able to fund these services in the usual way of charging subscribers or whether they will have to look at the traditional model of TV.”

A Virgin pilot with BT revealed people would watch a digital mobile TV service for an average of an hour a week with most willing to pay up to £8 (€11) a month while a study by O2 showed that 83% of the pilot participants were satisfied with its mobile TV service.

A report by telecoms analysts Strategy Analytics predicts that the mobile TV phone market is set to grow to $30bn (€24.9bn) in just four years.

It claims that sales of TV phones will pass fixed TVs by 2012 as handset prices continue to fall.

However analysts believe the mobile TV market will supplement, rather than replace, existing home TVs.

The boom in the mobile games, camera and ringtone markets are held up as proof that people want to use mobiles for more than simply making calls.

Neil Mawston, Strategy Analytics associate director, said Europe currently lagged behind other international telecoms markets.

He said: “Japan and Korea dominate market volumes today, accounting for over 80 percent of TV phones sold in 2006.”

But he added that Western Europe, North America and China are expected to see booming sales of mobile TVs over the next few years.

“We expect Western Europe to ramp up to over one million units sold this year, with North America and China coming online in 2007.”

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