Many markets worldwide have seen the rollout of mobile TV services based on broadcast networks, but subscriber uptake and revenue growth has been rather disappointing so far. Also, mobile TV via 3G streaming, a service offered by most mobile operators, has so far not become more than a niche market. As a result, market players are increasingly critical of mobile TV services.
As in other new mobile data services, the industry has had to cut its projections for broadcast mobile TV. Worldwide users number some 40 million or just about 1% of all mobile phone users. With many mobile phone users watching broadcast mobile TV free of charge, Arthur D. Little (ADL) estimates that total worldwide revenues from mobile TV - via broadcast and 3G streaming - were less than $3 billion in 2008.
A wide range of broadcast mobile TV businesses has been launched around the globe. Most are still in the early stages and show limited subscriber numbers, although broadcast mobile TV businesses in Japan, South Korea and Italy have achieved mass-market adoption. However, even these businesses have not yet proven their ability to secure sustainable commercial success. One key barrier to the global uptake of broadcast mobile TV services is the deployment of many different standards.
Despite these developments, ADL's study titled \'Mobile TV - Tuning in or switching off‾' finds that mobile operators remain interested in promoting mobile TV services as these can support customer acquisition and retention, and can be used to promote high-value flat-rate packages. Additionally, the service is seen to help mobile operators offset the commoditization of voice and data access services.
As such, key players are working on improving the service and lowering the price of mobile TV services to attract end-users. They do this by continuing to develop the density of the broadcast network with a focus on improving indoor reception and providing the services via hybrid networks that combine delivery through 3G streaming and broadcast.
The report noted that other efforts include enhancing the attractiveness of channel bouquets by providing \'made for mobile\' TV channels, and improving the variety and availability of mobile TV-enabled devices. For example, Nokia now offers a low-priced Bluetooth dongle that receives the DVB-H signal and enables users to watch DVB-H based mobile TV on phones already owned by users.
However, ADL says all key players also need to work on lowering the costs of delivering broadcast mobile TV services, especially since the profit potential from broadcast mobile TV services for mobile operators is low. In an exemplary country market, mobile operators can only generate $1.33 profit per mobile TV subscriber, provided that 10% of all mobile phone users in the market subscribe to broadcast mobile TV services at a monthly fee of $8.
Considering that, ADL said any plans for new broadcast mobile TV businesses must be directed to bringing down network roll-out costs, incremental handset subsidies and content costs. It suggests combining existing mobile networks with broadcast mobile TV networks and financing the content costs partially with advertising.
Moreover, mobile operators need to factor in indirect benefits from offering broadcast mobile TV. They can use broadcast mobile TV services to differentiate their services, increase customer loyalty or offload traffic from 3G streaming TV services.