3 Group is definitely leaving its mark on the cellular operators of Europe, it has been a pioneer for cheap 3G services, flat rate handset broadband and the global leader in DVB-H mobile TV services.
It has also partnered for the first Skype handset, and has brought place shifting to handsets across Europe on the back of its cheap data services.
Now it looks set to make good in Italy on its promise that it will become an entertainment business not just a cellular operator and it says will offer a handful of DVB-T digital terrestrial TV channels over the next few years.
Meanwhile CEO of 3 Italia Vincenzo Novari, has come out in public and said that parent company Hutchison Whampoa would be happy to sell a big stake, perhaps 30%, in the cellco, with Deutsche Telekom heading the list of cellular operators that have make a clear statement of interest. Management at the parent company is also thought to be interested in selling the entire Italian business.
3 Italia has taken on both Telecom Italia and Vodafone in Italy and has carved out 7.7 million 3G customers since its launch in 2003, with 10% of those buying DVB-H mobile TV services, at an average ARPU hike of around $13 extra per month each, and using it for more than 1 hour per day.
It’s unclear just where the spectrum is coming from to run these digital terrestrial channels, but the CEO hinted that it would split its existing spectrum half for TV and half for mobile TV.
Now we can’t believe that Novari means that 3 Italia will halt some of its DVB-H programming, but since the company has just 16 mobile TV channels, there is a possibility that with an advanced statistical multiplexing across the 8 MHz spectrum that the company can find room for 3 TV channels, while compressing the existing mobile TV service down to using just 50% of the spectrum. But Novari has said 3’s network will have the capacity to broadcast, two high definition channels plus two SD channels. A single 8 MHz channel right now can only deliver around 6 SD TV channels, so we’re unsure of exactly how he intends to pack in a few extra HD channels.
The target is to get this up and running by the summer of 2010 and the company says that it will run them free to air, rather than encrypted and paid. Most DVB-T programming across Europe is free to air, but new paid channels are just beginning to emerge with the introduction of Conditional Access systems on the set tops.
The aim is to make a killing out of the analog switch off that is scheduled for Italy during 2012 and no doubt the company will be trying to offer its expensive DVB-H transmitter network, which cost it $400 million to build, as part of the route to market for other TV channels. However in order to do that it would have to work with its own spectrum plus that allocated to other broadcasters.