Foundation before Bob addresses use cases and deep dive Mobile network operator perspective
Many operators are using 3G network to deliver video but it doesn’t scale well. There are still plenty of capacity on 3G network because there is not much application but some operators will be out of 3 G capacity in a few years. There is a desire for entertainment but when people asked whether they would like to watch TV on a mobile phone they say no. Saying there is a customer demand is a fallacy.
The reception of the service on mobile phones must be ensured indoors and outdoors. Trials have shown that a significant proportion (40% to 50%) of usage of mobile TV is actually generated at home. It has also be found that significant usage is generated in the office. TV Channels are encoded at 300kbps Audio is encoded at 50kbps Good offering should be 25 TV channel and 10 radio channels The most popular programs are news, sports and comedy. It is mostly because they can be packaged into segments of 5 to 10 minutes. However, in korea in one of the most developed mobile TV market it has been shown that drama (30 minutes or so) are the most popular!. People don’t seem to like truncated content Also music is popular but more as a background versus a visual-oriented activity.
In the UK only the DAB spectrum is available The analog cut off should make some spectrum available There is some effort by the european community to standardized spectrum throughout europe but it will be tough. Some countries may not accept Qualcomm and may impose DVB-H or T-DMB In some european countries (Germany being an example) the regulator imposed that the distributors of service would not also manage the service platform
Early to assess which one will dominate Some are missing T-ISDB in japan and a little bit in brazil Many trials and a few deployments. There are three categories: terrestrial broadcast: most straightforward, requires a lot of spectrum and initial investment is high Satellite: DVB-H, and S-DMB, initial large coverage but needs many repeaters, also need frequency Cellular broadcast: seems nice but it has a major drawback in the sense that operators would need to dedicate part of its frequency resources to broadcasting services instead of unicast service. The 17-67km cell size of DVB-H is actually a little bit theoritical as the 40 to 60km for T-DMB (it really depends in which band you operate) Trials around europe in Italy, Germany, … have shown that the average radius Urban: Suburban: Rural: Emitter 3.5 6 8 # Repeater per emitter 4 1 0 It is obvious that the possibility to reuse cell site is crucial. The number of site for the same population vary greatly based on the population density and distribution in the territory: For a similar coverage you would need about twice the number of emitters and repeaters in france than you do in the UK. There are also great variation in term of CAPEX for transmit power a low power emitters can be about $70K while a high power emitters can be as high as $500K A rough estimate – 80% coverage of france would be a least $500M and maybe $250M for the UK. T-DMB is a derivation of DAB. DAB is used in the UK. T-DMB is a narrow band solution. The channel are narrow – 1.5Mhz which allows for 1.1 Mbps or so. I operate a low frequency and can reuse DAB emitter. It is usually a cheap solution to deploy. Only 3 emitters were necessay in Seoul in the band III, and only 4 high power sites were necessary in the L band in germany to reach out Berlin MBMS: Plusses: 3 G network optimization, no regulatory complexity, limited investment Minusses: limited capacity for broadcast and late market availability. MediaFlo: used by Verizon Vcast – trialed in a few places Sprint, T-Mobile, AT&T -- operates in 700Mhz DVB-H ----- Modeo L band – 1.6Ghz DVB-h ---- Hiwire UHF 700Mhz
Cost is a big issue. The cost of adding DVB-H , TMDB or any other technology has to be added to the cost of the phone and then most likely subsidize by the operator The cost are in three areas: HW: DVB-H chipset and radio element SW: end to end sw Integration: integrating DVB-H into the cellular design and adapting handset form factor The cost will be anywhere from $100 initially to potentially $40 after 10 years or so. We estimate that the subsidies constitute the majority of the annual cost of operating the network above 50%. Multistandard chipset – different bands – different protocol ---- OTT vendor iPhone with Wi-Fi Archos is planning to add DVB-H to its devices Nintendo has a ISDB-T (integrated service digital broadcasting – terrestrial) on the Nintendo DS
Italy has two DVB-H networks
Outside South Korea it is the only T-DMB system deployed. It was done in 2006 just before the soccer world cup. Was initiated by a start up called MFD or mobiles Fersnsehen Deutschland. MFD developed the mobile broadcast platform. In particular it sources the content for the platform, ensures the daily service operations, implement evolutions in the service offering, defines the hardware specifications and decides on the electronic service guide and conditional access systems. MFD has partnered with T-Systems for the network infrastructure and with Irdeto for conditional access. T-DMB is most likely not way to go but the business model is of interest. It gives small operator an option to deliver video. There are only a few channels available , but delivering video in a “radio” band is much cheaper than DVB-H or MediaFLo MFD has only 1 channel of 1.5Mhz which equates to about 1.1 mbps Debitel is a small MVNO but it has about 9million subscribers mostly in germany. DVB-H is actively promoted by four mobile operators: vodafone, t-mobile, o2 and E-plus have formed a consortium to set up a DVB-H network in germany. This consortium is expected to influence technology, regulatory and business choices around dvb-h and also speed up the allocation of resources. MFD is a little stuck because it is too small. The options are Getting more frequence VHF (similar to band III) , UHF or in the L-Band --- more programs and better coverage Obtain a uhf frequency to roll out dvb-h: the main benefit would be to greatly increase the number of channels in urban areas but that would imply that mobeil operators are willing to partner with MFD for the set up of DVB-h in Germany Developing this strategy require MFD to focus on a number of issues: It will need devices supporting multiple bands and multiple mobile broadcast standards It will need a common conditional access system for T-DBM and DVB-H A common ESG is also needed so that the user interface is the same whatever the delivery technology is Some developments on the platform side will be required to support the delivery mechanism of both T-TDM and DVB-H It will need to agree with the operators to offer them personalised branding and channel packaging MFD strategy is not limited to cell phone. It has also work with car companies (Audi, BMW, Blaupunkt and Bosh) for in car receiver.
Japan and South Korea in early 2002 started to offer video over 3 G network – it was unicast South Korea 3G network was been maxed out and the country decided to build a mobile broadcast network. TU Media – a subsidiary of South Korea Telecom (which owns 30%) - own and operate a S-DMB network $100 million to buy, send and build operation center for satellite $250 fillers and restransmitter $100 broadcast center and other S-DMB operate at 2.6Ghz and T-DMB operate at 200Mhz The handset are pricey $600 to $800. The issues are the same as 3G but in general satellite phone are bulkier. WHAT DRIVES MOBILE TV IS THE POPULARITY OF TV DRAMA. THE INABILITY OF TU MEDIA TO GET A LICENSE TO BROADCAST the dram from the three free to air broadcaster is a major issue. Also, the structure if the terrestrial market in Korea, which is composed of several regional broadcasters, each with its own discrete footprint – makes it difficult to arrive to an agreement for S-DMB broadcasts terestrial content. Each regional broadcaster customized around national feeds with local content and S-DMB is unable to adjust on a regional level because its footprint is national. The result has been a launch that exclude content from the three largest broadcasters in the country and a lineup that onluce include cable content and terrestrial rerun. In term of content News, sport and comedy are the most popular based on survey but what the Korean deployments show is that drama is even more popular.
Operated by KT Telecom and LG Telecom and a collection of local broadcaster Struggle with business model … The regulator refuses to allow a mobile operator to charge for services in the 200Mhz because the content is mostly a simulcast of free to air content from the 3 major networks. The government sees T-DMB as a broadcasting issue and not a telecommunication issue. They need more content Operate in 200Mhz VHF
Cannibalitzation of IPTV? I don’t think so. Differentiate mobile TV as a pure entertainment offereing, not an extension of mobile services. There is some play to be done with perception. For example thte is a danger to bundle mobile TV into the monthly bill as data services.
Mobile Television: An Overview
Mobile Television: An Overview Patrick Pfeffer September 26, 2007
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Market Potential Mobile TV trend-scouting The RGU market for mobile TV is much larger than for fixed IPTV due to the large number of video capable mobile devices. 2006 2007 2008 2009 2010 3G Subscriptions (in M) DSL & Cable Subscriptions (in M) 6 Bob’s Estimates Number of DSL/cable line Number of 3G or video ready phones during the next +16% +63%
Market Potential Mobile TV value innovation Like for IPTV, customers are not asking for mobile TV. Operators must demonstrate value/price ratio to market. Value Proposition through innovation 4.580.000 Content Download Streaming On-demand Carousel Non-live Live Pay TV program Video on-demand Push and store Clips Subscription Free TV program Value Creation through content segmentation Core Requirements <ul><li>The service must be available outdoor, indoor and in moving vehicle </li></ul><ul><li>Public channels and pay channels are a must, special channels desirable </li></ul><ul><li>Radio must be available </li></ul><ul><li>Wide coverage (urban, suburban and main roads) </li></ul>Enterprise Mass market
Regulatory Issues The gray zone Pressure points All regulatory bodies are playing catch up with technology and early entrants are fighting awkwardness of obsolete regulations. There are regional differences. <ul><ul><li>Spectrum </li></ul></ul><ul><ul><li>Allocation and acquisition of scarce frequencies difficult in specific markets </li></ul></ul><ul><ul><li>Different regulatory bodies in geographical markets (even within same country e.g. Germany) </li></ul></ul><ul><ul><li>Some countries demand proprietary standards for broadcasting (e.g. China). </li></ul></ul><ul><ul><li>Content </li></ul></ul><ul><ul><li>Regulatory issues concerning unicast content (e.g. VoD) vs. broadcast transmissions </li></ul></ul><ul><ul><li>Public vs. commercial broadcasting </li></ul></ul><ul><ul><li>Digital Rights Management issues regarding distribution, protection and royalties for copyrights </li></ul></ul><ul><ul><li>Protection of consumers </li></ul></ul><ul><ul><li>Commercial </li></ul></ul><ul><ul><li>Free to air networks might prohibit charging for service (e.g. South Korea) </li></ul></ul><ul><ul><li>Coverage requirements might forbid profitable network rollout </li></ul></ul><ul><ul><li>Non discriminatory conditions between different distribution platforms </li></ul></ul>
Technology Options Broadcasting technologies landscape – DVB-H standard gains momentum Broadcasting technologies – key facts Out of the large range of cellular, terrestrial and satellite broadcasting technologies, some of them are emerging as standards in different regions. 716 to 722 MHz, 698 to 746 MHz 174 to 230 MHz, 470 to 862 MHz 2.6Ghz VHF band III 1,452 to 1,492 MHz VHF, UHF, L-Band Frequency CAPEX MPEG, IP IP IP MPEG TS MPEG TS, IP Transport stream 2-10km 2-3 km 3-700km 40-60km 17-40km Cell Size 50-70 3 9-27 3-5 60 Channels/128kbps Time division multiplexing Time slicing Bandwidth Shrinking Bandwidth shrinking Time slicing Power Reduction MPEG-4 Up to 11.2 Mbps USA MediaFlo Media Forward Link Only MPEG-4 Up to 0.38 Mbps Europe, South Asia MBMS Multimedia Broadcast Multicast Service MPEG-4 Up to 2.3 Mbps South Korea, Japan S-DMB Satellite Digital Multimedia Broadcast MPEG-4 Up to 1 Mbps South Korea T-DMB Terrestrial Digital Multimedia Broadcasting DVB-H Digital Video Broadcasting Handhelds MPEG-4 Up to 11 Mbps Europe, USA, Australia Video Codec Download Rate Region
Technology Options Mobile TV devices Outstanding issues The challenge here is to find the balance between device cost, performance, form-factor and style depending on the target customer segment. Battery Technology and power management are two crucial aspects to determine the success of Mobile TV. Integration of new DVB-H, DAB or DMB tuners and channel decoders represents a significant challenge both in terms of energy consumption and components costs. Application processors, RAM memory, GPS chipsets, large and high resolution colour displays are vital for high quality of service and end-user acceptance. Ease of use and large choice of different mobile TV ready handsets are essential for the momentum market take-up
Current Deployments Status quo in early adopters markets In a nutshell Mobile TV market dynamics are heavily influenced by geographical characteristics and respective regulatory frameworks. <ul><li>Market split between Video on demand subscribers and Mobile TV services </li></ul><ul><li>MobiTV content aggregator approach is a success story </li></ul><ul><li>Mobile TV over WiMAX is talked about for 2008 </li></ul>USA <ul><li>Regulatory muddle due to federal system </li></ul><ul><li>Digital Right Management issues (GEMA) </li></ul><ul><li>European Commission initiative promoting DVB-H </li></ul>Germany <ul><li>Pitfalls of MBCo: no alliance with mobile operator, purpose built devices, distribution strategy </li></ul><ul><li>ISDB-T standard used for One Seg Service, no charging allowed by regulator </li></ul>Japan <ul><li>DVB-H is predominant, take-up push by FIFA World Cup 2006 </li></ul><ul><li>High pricing with early adopters </li></ul><ul><li>Wholesale approach by Mediaset to serve mobile carrier </li></ul>Italy Source: DETECON Research and Analysis <ul><li>Struggle between paid service and free of charge scenario </li></ul><ul><li>Pricing and handset affordability is a concern for user acceptance </li></ul><ul><li>Wholesale approach with 25% revenue share for mobile carrier </li></ul>South Korea
Current Deployments <ul><li>H3G acquired Channel 7 thus owning its own DVB-H license. H3G has been the first MNO offering Mobile TV and interactive services </li></ul><ul><li>TIM and VOD signed wholesale agreements with Mediaset. Mediasets’ channels can be viewed by both TIM and VOD UMTS/DVB-H subscribers </li></ul><ul><li>Two players: H3G (vertically integrated) and Mediaset (wholeseale) </li></ul><ul><li>Mobile TV offering to pre- and post-paid customers </li></ul><ul><li>20 channels available </li></ul><ul><li>Pricing options: daily (3€), weekly (10€) or monthly (10€) basis </li></ul><ul><li>Both Mobile TV platforms enable basic interactive services: Channel subscription, ring tone download, and voting </li></ul><ul><li>Interactive platform is a proprietary solution, lack of standards </li></ul><ul><li>DVB-H/UMTS integration enables a seamless interactive services </li></ul><ul><li>Technology enables service subscription on handset </li></ul><ul><li>Both DVB-H MUX cover 75% of country (outdoor) </li></ul>Technology Market Success <ul><li>High penetration of 3G (EY 06): 21M </li></ul><ul><li>H3G Mobile TV subscriber (including sporadic users (Mid 07): 500K </li></ul><ul><li>TIM/VOD subscribers together (Mid 07): 100K </li></ul>Player Product Description logo Interactive Services <ul><li>Intense marketing campaigns </li></ul><ul><li>MNOs want to merge IM-TV with existing UMTS based video services and further develop basic interactive services (e.g. betting, shopping, etc.) </li></ul>Strategy H3G Mobile TV w. channel subscription service Voting at Mediaset Italy With 600K Mobile TV subscribers Italy is the most developed European market. There are two mobile broadcast networks. Interactive services are in infancy.
Current Deployments <ul><li>MFD signed content partnerships with ARD, ZDF, MTV and Pro7Sat.1 </li></ul><ul><li>Partnership with Mobile Service Provider: Debitel, Victor Vox, others. Together they amount 25% of all mobile subscribers in Germany </li></ul><ul><li>No partnering with MNOs (TMO, VOD, O2, EPL) </li></ul><ul><li>In 06 Mobiles Fernsehen Deutschland (MFD) has launched the first broadcast based Mobile TV service </li></ul><ul><li>Channels: ARD, ZDF, MTV, N24, a Pro7Sat.1 and a visual radio station </li></ul><ul><li>Limited interactivity: ESG, sent-in MMS as visual radio message, ring tone and music download (both BigFM), WAP based services (IFA show case) </li></ul><ul><li>Trial: Mobile soaps with SMS as reminder and content-elements </li></ul><ul><li>MFD uses DMB, broadcast technology based on DAB </li></ul><ul><li>Technology enables WAP based backchannel integration </li></ul><ul><li>MFD holds a nation wide L-Band license </li></ul><ul><li>Coverage only in large metropolitan areas; 16 Mio. potential users </li></ul>Technology Market Success <ul><li>Watcha Subscriber (Estimate): 7,800 (YE06) </li></ul><ul><li>Monthly flat rate differs between 5 € and 10 € </li></ul><ul><li>Revenue sources: Service subscription, advertisement and user interaction </li></ul>Player Product Description Interactive Services <ul><li>MFD is positioning itself as a technology independent Mobile TV platform operator </li></ul><ul><li>In competition to a consortium of TMO, VOD E-Plus and O2, MFD also pursues a DVB-H Mobile TV license </li></ul>Strategy Watcha Mobile TV offering Sent-in MMS as visual radio message Germany Watcha is the first broadcast based Mobile TV offering in the German market. It features only limited interactivity.
Current Deployments <ul><li>TU Media (broadcast service company, SK Telecom owns 30%) operates the country’s S-DMB network </li></ul><ul><li>TU Media aggregates content and simulcast cable content </li></ul><ul><li>25% to content owners and 25% to MNOs </li></ul><ul><li>Pay-TV only (thus threatened by free T-DMB based Mobile TV) </li></ul><ul><li>Large variety of channels: Music, news, lifestyle, economy, traffic, local YTN, 1to1, U1 Media (channels), </li></ul><ul><li>Content: 75 % video, 25 % audio </li></ul><ul><li>One-time connection fee ($20) and usage-dependent content fee (ARPU $20). </li></ul><ul><li>Geostationary satellite-based DMB, amplified via about 6000 repeaters in inaccessible areas </li></ul><ul><li>Operate in 2.6GHz </li></ul><ul><li>Repeaters work with Ku-Band at 12GHz </li></ul>Technology Market Success <ul><li>Launch in May 2006, 1 Mio customers in Nov 06, Forecast: 6,6 Mio user in 2012 </li></ul><ul><li>Still fast growing, but less than T-DMB, Total Revenue DMB 2007 forecast): € 240 Mio </li></ul><ul><li>High-priced handsets, questionable user exp. </li></ul>Player Product Description Interactive Services <ul><li>KT telecom service using WiBro and DMB – users will be able to retrieve information through WiBro in the background and display it on the screen (e.g. with Samsung M8000 + extra receiver ) </li></ul><ul><li>Usage of Mobile TV popular in metropolitan areas for commuters, but limited to cell phones (larger variety at T-DMB possible) </li></ul><ul><li>Average viewing time/day 62min (average world: 15-20 min, average Europe: 2-3 min) </li></ul>Strategy South Korea Satellite-based DMB is threatened by free accessible T-DMB. Combination with WiBRO for interactive services.
Current Deployments <ul><li>Korea Telekom holds DMB license, runs network and defines channel portfolio (e.g. KBS, MBC, SBD, etc) </li></ul><ul><li>MNOs take advantage of free DMB service and sell handsets </li></ul><ul><li>Content providers (e.g. KBS, MBC) broadcast their channels free </li></ul><ul><li>Service is free (Regulator) </li></ul><ul><li>Revenue to be gained via customer retention in other offerings </li></ul><ul><li>Service usage: automotive devices (50 %), USB-Devices (30 %), mobile phones (20 %) </li></ul><ul><li>Seven DMB-TV channels, 13 DMB-Radio channels, eight data services (JPEG Slide Show, Dynamic Labeling, Wireless Service, Traffic Service) </li></ul><ul><li>Domestic technology based on the DMB standard used by DTT and satellite broadcasting throughout Europe and Asia </li></ul><ul><li>Runs at 12MHz (10 times more capacity than Germany’s MFD) </li></ul>Technology Market Success <ul><li>Launched in 2006, already 0,6 Mio users after four months </li></ul><ul><li>Forecast: 4 Mio users EY 06, 13,9 Mio in 2012 </li></ul><ul><li>Total Revenue DMB (2007 forecast): € 240 Mio </li></ul>Player Product Description Interactive Services <ul><li>Usage most popular while commuting or at work/school </li></ul><ul><li>Fast growth, but not profitable yet </li></ul><ul><li>Many type of devices available </li></ul>Strategy Traffic information service on a PDA Traffic information service via DMB South Korea Fast growing terrestrial DMB Mobile TV with free access shows high growth rates. Some interactive services.
Current Deployments <ul><li>Qualcomm owns the spectrum, runs the MediaFLO broadcast network and provides the service on a white-label basis </li></ul><ul><li>Verizon purchased the MediaFLO service and integrates it into its overarching “V Cast” mobile entertainment platform </li></ul><ul><li>V Cast is a 3G network created by Verizon, used for broadcasting Mobile TV channels, video clips and music (e.g. CBS Mobile, Comedy Central, Fox Mobile, MTV, NBC, NBC News, Nickelodeon, etc.) </li></ul><ul><li>Video content: Music, Showcase, Comedy, News, Weather, Entertainment, Sports, Net’s Best (e.g. You tube) </li></ul><ul><li>Features: Channel surf with no buffering, intuitive program guide, text reminders for favorite shows, call taking without interrupting program </li></ul><ul><li>Verizon’s V Cast service integrates unicast and broadcast technology </li></ul><ul><li>Verizon Wireless’ Third Generation Wide Area 1XEvDo network </li></ul><ul><li>Data transmission at speeds of 400-700 Kbps and bursts of up to 2.0 megabits per second </li></ul>Technology Market Success <ul><li>Commercial launch: March 2007 </li></ul><ul><li>V Cast service costs $15/month (basic package) or $25/month (select package) with unlimited basic video clips, access to mobile Web 2.0, unlimited airtime and email); limited package $13 </li></ul>Player Product Description Interactive Services <ul><li>Pull strategy: Offering of popular channels attracts customers to services </li></ul><ul><li>MediaFLO signed a Mobile TV wholesale agreement with Cingular </li></ul><ul><li>Available in 35 states </li></ul>Strategy Entertainment and weather on VCast USA Verizon markets Qualcomm’s MediaFLO broadcast Mobile TV service. It enables very limited interactivity.
Current Deployments <ul><li>MobiTV owns the service, defines portfolio and delivers the app </li></ul><ul><li>MNOs (Sprint, Cingular, Midwest Wireless, nTelos, US Cellular, Cellular South) have signed wholesale agreements with MobiTV </li></ul><ul><li>Service offers both live streaming and on-demand video clips </li></ul><ul><li>Mobile TV available in English and in an English/Spanish version </li></ul><ul><li>Service offers more than 10 popular channels (e.g. MSNBC, ABC, CNN) </li></ul><ul><li>Several interactive features: Interactive advertising, Interactive M-Commerce (e.g. purchase ring-tone or ticket), Interactive Content Rating, Voting, Sharing & Community </li></ul><ul><li>MobiTV supports multiple 3G network technology and hardware systems </li></ul><ul><li>Compatibility includes several cell phones (Nokia, Motorola, Samsung Sony Ericsson etc.) and smart phones </li></ul>Technology Market Success <ul><li>More than 1 Mio subscribers </li></ul><ul><li>Fees vary depending on vendor </li></ul>Player Product Description Interactive Services <ul><li>Pull strategy: Offering of popular channels attracts customers to services </li></ul><ul><li>MobiTV is likely to sign agreements with further MNOs </li></ul>Strategy Sports and news on MobiTV USA MobiTV is a 3G Mobile TV service predominantly available through Sprint and AT&T. Many interactive features available.
Conclusions <ul><li>Many technologies </li></ul><ul><li>Handset drag down </li></ul><ul><li>Various business models </li></ul><ul><li>Cannibalization of IPTV ? </li></ul><ul><li>Customer demand fallacy </li></ul><ul><li>Content might not be too complicated </li></ul><ul><li>Mobile TV + 2/3G services </li></ul><ul><li>Part of the bundle </li></ul>
Contact 4% Integrated management and technology consulting worldwide Patrick Pfeffer Detecon Inc. 400 S. El Camino Real, Suite 500 San Mateo, CA 94402 Phone +1 650 401 5222 Fax +1 650 401 5298 Mobile +1 707 971 0471 [email_address]