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Mobile Broadcast TV Caution Needed as Bubble Grows!

2 Key-Point Conclusions

Although both early unicast TV offerings and DVB-H trials indicate moderate levels of demand for mobile TV these results cannot yet be viewed as a full endorsement of mobile TV by the mass market
Indeed, both our consumer surveys and usability panels indicate that mobility does not add a sufficient premium to TV to justify spending more than $5 - $10 per month
We believe that penetration rates of above 15% of cellular users will be achieved only once prices fall into the sub $5 per month range
This conservative outlook requires that carriers and other potential suppliers of pay TV services adopt low risk strategies to participation
Although our view may be revised as further work into the performance of MBMS relative to dedicated broadcast networks is established, the lower costs and uncertainties associated with MBMS, combined with still uncertain demand, lead us to conclude that carriers should strongly focus on this as a medium term option
Spectrum availability in the UHF band is impacting the time to market advantages that DVB-H has developed through recognition by ETSI and multiple pilot implementations. Nevertheless, we expect it to become the leading mobile TV standard globally with 45 million viewers by 2010
DAB based solutions such as T-DMB will benefit from cost and time to market advantages over DVB-H in certain markets. We expect that T-DMB will be moderately successful globally, with almost 28 million users by 2010
Within the US we are projecting over 5 million subscribers for FLO by 2010. While Qualcomm retains ambitions to market FLO overseas, we are not confident that it will gain significant traction outside of the US despite superior performance attributes.
Carrier ownership of the digital broadcast network is not necessary to provide mobile TV services. Leasing of broadcast capacity on a wholesale basis offers a better risk profile for the delivery of mobile TV.
Carrier control of devices sold through their retail channels provides them with a powerful barrier to entry into mobile TV service supply.

Industry Report
Mobile Broadcast TV: Caution Needed as Bubble Grows!
March 2006

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