We can’t imagine who might have complained to the German cartel office which investigates anti-trust in Germany, but it has said that it will investigate the idea of Vodafone, T-Mobile and O2 working together on a mobile TV service based on DVB-H.
The story broke in the German edition of the London Financial Times and the investigation is expected to take three months and is an upgrade of a standard review to a more complete investigation.
The companies that have the most to gain from the referral will be Debitel, which runs a T-DMB mobile TV service, which has failed miserably to attract customers since it launched almost a year ago, and E-Plus, which dropped out of the same consortium late last year.
Suddenly the fairly unpredictable German Cartel Office (it has come up with some surprising decisions in the past that don’t concur with European Union sentiment) is about to take a decision that could affect all DVB-H operations going forward, on an almost global basis. All of the major cellcos have said that the cost of buying spectrum and building out a DVB-H is too risky for a single operator to take on, and that they can all use the same infrastructure and either differentiate with their VoD or cellular streaming video services, in the way they present their services at the EPG and video platform level or that they can each have some unique channels and a separate head end and DRM set up.
This collaborative approach has worked in Italy (around Mediaset, Vodafone and Telecom Italia) and a similar approach is being tried in Finland. The same type of set up is being pursued in France, where spectrum allocation is imminent, and in the UK, where no-one can see where spectrum is going to come from for DVB-H services.
The argument against allowing the big cellcos to team up is not just that they cannot compete with each other or offer differentiated services, but that collectively they have the financial power to win in every market, effectively creating a European cartel. Vodafone for instance will be in every one of the major European countries (if you include SFR in France as a Vodafone vehicle).
Of course if Germany decides that they cannot bid together it doesn’t stop them joining a bid with Orange in France, but it might if the case goes as high as the European Commission.
An adverse decision would also mean that the operators would have to bid against each other for the spectrum, but in the end might offer the services at an arms length to other operators, in order to get it to profitability rapidly. There is also the added complication in Germany that broadcasting licenses are allocated on a regional basis, so even if this consortium is free to bid it will have to win four separate auctions.