Chatting to Charles Townsend, the CEO of Aloha Partners last week, it became pretty clear that no-one is raising a white flag in the US over MediaFLO’s dominance of the US mobile TV market, least of all Aloha.
Aloha Partners is the spectrum partner which with SES Americom is hoping to create a DVB-H mobile service in the US, to compete head on with MediaFLO.
Aloha has long held its two 6 MHz channels of 700 MHz spectrum and before it was associated with DVB-H, we heard it discussed as highly effective wireless broadband spectrum. We have always been clear to put forward the idea that Aloha was in fact a spectrum trader and not really interested in building what might be a $500 million network across the US, but really looking to prove the value of the spectrum ahead of next year’s 700 MHz auction of US analog TV spectrum, so that it might sell off its spectrum at a vast profit.
Why, we asked last year, wouldn’t Qualcomm augment its single channel by offering to buy the Aloha spectrum and ensure that MediaFLO can see off all challengers?
‘Because it’s not for sale,’ says Townsend pure and simple, not prone to wasting words. ‘We expect that MediaFLO will go after Channel 56 when the auctions come around,’ and added, ‘ It wouldn’t pay us what we think the spectrum is worth.’
‘We think that there will be two mobile TV networks in the US, MediaFLO and ours,’ says Townsend. We respectfully reminded Townsend that Alcatel was a pretty powerful operation and it has already cut a deal with Craig McCaw’s ICO Global Communications satellite company to put its DVB-SH service out during 2008, offering blanket US coverage about the same time that MediaFLO achieves the same, and then infilling cities with booster signals to achieve better in-building penetration thereafter. However this is in 2 GHz S-Band.
ICO which will trial, and potentially deploy, a US wide mobile TV network using a Loral built satellite, almost ready, planned for launch in November this year.
Townsend said simply, ‘That system won’t go through walls. So people will only be able to use it outdoors. It will be fine for in-car devices, much the same as the satellite radio services which offer in-car services today, but we don’t think it will go through walls.’
Reminding him of tests that Alcatel has done boosting the signal, by adding an extra terrestrial transmitter to existing 3G towers, he simply repeated, ‘We know the DVB-SH signal won’t go through trees and we don’t think it will be very good in-building.’
What did he think of the prospect of Sprint using WiMAX to offer a rival to both HiWire and MediaFLO in the near term? How did he think that Sprint might go about taking the cable operator TV to market on a handset?
‘The Sprint WiMAX network will be pure data at first, 2.5 GHz is very expensive to build out, and if Sprint wanted to plan its network for video it would mean building 10 times as many cells as the 700 MHz spectrum we have.’ Does that mean that Sprint will have to use his own service? Has he spoken to them?
‘We don’t know what Sprint is doing, we know that it has tested MediaFLO, but we expect that its video to the handset will remain streaming video over its EV-DO network for some time to come. It could use one of the 700 MHz networks (MediaFLO or HiWire). Carriers tend to line up with the technology that comes from their existing suppliers. Verizon and Sprint with a CDMA network, and AT&T and T-Mobile with GSM derived technology.’
Townsend is right, which is why it was such a wrench in favor of Qualcomm when a non-CMDA operator in the form of AT&T, took the decision to go with MediaFLO, alongside Verizon. Verizon has already launched this service as VCast TV in a number of US markets offering 8 TV channels, while AT&T has yet to clearly articulate when and how it will bring the MediaFLO channels to market.
Can HiWire then build out a US wide network purely on the traffic that T-Mobile might bring to it? Townsend squirms at this question. He is clear that HiWire will not commit to the broad spending that a DVB-H network will require until it has an operator behind it, but demurs when we suggest that the 25 million customer T-Mobile is the last major operator in the US that is available to be tied down to a mobile TV service.
The implication is clear, but Townsend refuses to acknowledge it, that AT&T is in a state of vacillation about mobile TV and perhaps signed for MediaFLO so that it can cover the Verizon launch if it has to. It may still be talking to HiWire (and others) about backing a different network, and if you add a sudden change of heart at AT&T to the numbers that T-Mobile can bring to the party, then there really would be the potential for DVB-H to take its fair share of the US mobile TV market.
But what would lead to a change of heart at AT&T? Again Townsend won’t address it directly, but says, ‘When you take a long hard look at cable TV channels, you find that most people watch just 15 channels. When you look across TV demographics you find that all the chunks of 15 TV channels that are watched add up to around 45 channels in total. If you narrow this down by excluding some of the viewer groups (HiWire is targeting 15 year olds to 40 year olds) you end up with around 30 channels. We have the spectrum to offer 30 channels (well at least 24 channels, and double whatever MediaFLO can do) while they (MediaFLO) can only bring 12 to 15 channels.’
His argument is that anyone that doesn’t want to wait until well into 2009 to begin building a mobile TV network with discarded analog TV spectrum, has to go with either HiWire or MediaFLO, and that the only one of these that can bring the full suite of channels needed for mass adoption is HiWire.
That suggests to us that HiWire is hoping this statistic will help persuade AT&T and T-Mobile that they will have an edge over Verizon if they back HiWire and so trigger a change of heart.
One rival that has recently fallen by the wayside in the US mobile TV scene is Modeo, selling off its existing efforts to Telcom Ventures and Columbia Capital who are both known to have had interests, in the past, in satellite radio through XM Satellite Radio. Could they help turn the satellite radio players into satellite mobile TV players using this spectrum and present yet another rival?
‘Modeo has a single 5 MHz slice of L Band spectrum. Whereas we have two channels of 700 MHz, which we can broadcast at 50,000 watts in a 25 mile circumference. That spectrum might be okay to offer something, mostly to the in-car audience that the satellite radio companies already have, but we don’t expect it to emerge as a direct head to head rival.’
Finally we raised the subject of the 8 Vestigial SideBand (8VSB) transmissions that are being pitched by Harris and its partner LG Electronics, as a way of existing TV stations sending a digital ATSC TV signal and a mobile signal in the same spectrum. Is this worth partnering with or does it represent a threat to HiWire?
‘If a TV broadcaster uses some of its spectrum for sending a mobile version of a TV channel in parallel with an SD version, he will be using up spectrum that he could have devoted to TV. As we understand it a 6MHz TV channel will be able to offer 4 digital TV signals in ATSC. If you use one of these for mobile, then it will be three. Can we see TV broadcasters giving away all that advertising revenue just to offer a mobile TV channel? No, we don’t think so.
‘Also in different parts of the country leading TV channels are offered in different frequencies, so when a customer moves from one to another there has to be a handoff from the transmitter, and the receiver also has to be able to see an awful lot of the UHF spectrum at one time and know where each channel is in each market, and it would also need to know physically which market it is in at any given point,’ he says.
HiWire has always maintained that it is just two years away from a national build-out of its network, and that it will cover 181 million potential customers.
In April Hiwire began consumer trials of its service in Las Vegas, the same market rival Qualcomm MediaFLO chose for its initial launch so that it could offer a direct comparison in a market where traditional television broadcasters had already vacated the 700MHz spectrum.
HiWire is working with transmitter manufacturers Rohde and Schwarz and DMT, and with RRD for the software platform, with no Nokia equipment in sight. If it did talk to Nokia, then perhaps it could take the opportunity to plead its case, which is as the founding father of DVB-H and it might be well placed to help fund the build out of such a network, something that it has never considered before. But it might do it under the new management, if only to spite its rival Qualcomm.