When an Alcatel source told us at the Mobile TV World Congress in Paris two weeks ago that two of its strong European targets were Spain and Poland, for its DVB-SH mobile TV system, we were somewhat skeptical, but he replied ‘They have no spectrum.’
But they both have strong DVB-H trials and surely Spain has just put off spectrum allocation while it has elections, its government not getting around to signing off the necessary legislation prior to going for another public mandate.
Now a report in Advanced Television has the Minister of Industry there confirming the Alcatel view, saying that the regulation changes will be completed at the tail end of 2008 and that the build out can only happen through 2009,and DVB-H services cannot begin until 2010.
The UK has similar, if not worse, problems and this has the big four cellular operators in the UK looking for an interim solution for the time being and this week Orange and T-Mobile agreed to use the TDtv system from IP Wireless, now a subsidiary or Nextwave, to use their spare 5 MHz of TDD spectrum in the UK to go to a commercial trial in London, and then on to launch a 100 channel TV system.
If the Alcatel source is accurate, then Poland will be faced with the same dilemma after its DVB-H trial and the splintering of technologies across Europe will be unavoidable despite the EU Telecoms Commissioner Viviane Reding pushing through DVB-H as the ‘approved’ European standard for mobile TV.
There are, or have been, DVB-H trials in at least 17 of Europe’s 27 countries, and this includes the big ones ‘ UK, France, Germany, Italy and Spain ‘ but of these only Italy has a live service (in fact two) and France and Germany are hoping to launch services during 2008, with Austria and Switzerland also expecting service launches. Ironically the countries that are not yet in the European Union, but likely to join, including Croatia, also have DVB-H trials, and are likely to have a better chance of freeing up spectrum than the existing members.
On this issue Faultline is in the ‘DVB-H should NOT be the only standard for Europe,’ camp, because many countries on the borders of France, Germany and Italy will not have any kind of mobile TV until a year after their digital TV switchover, when there may, and we emphasize may, be some UHF spectrum to use for mobile TV. Many cellular operator businesses are planning a leap straight to mobile internet and that could use up huge swathes of spectrum, shared, as it might be by auction, between three or four cellular players per European country. Waiting until 2012 or so only to find that you are outbid for spectrum is not a good outcome for any business that relies on mobile TV ‘ whether that be broadcasters or tier two cellcos.
So the question that many operators around Europe will be asking, will be ‘What can I put in place for now?’ and at the head of that queue will be Orange and Vodafone ‘ both of which have huge unicast TV services, eating up cellular spectrum. We have been told by Orange that if it does not move some of its mobile TV off unicast by the end of 2008, it will no longer be able to add more 3G customers.
Now the biggest crunch for Orange is in France, where there will be a DVB-H service by the end of 2008, and it has bid for two channels of its own. It can also try Alcatel’s DVB-SH, and perhaps augment its own channels with that technology or with MBMS.
For Vodafone it too has the DVB-H service in France for its SFR associate, and another in Germany, and it already is on the DVB-H service in Italy, but now it will have a double problem, what to do about Spain and the UK, two of its biggest markets. There are less unicast TV customers in Spain, so its most acute problem is in the UK where it now has to either engage with DVB-SH or follow up its TDtv trial in Bristol, which has resulted in Orange and T-Mobile moving on to this week’s announced commercial trial.
To us that is the favorite move, copy a rival like Orange, perhaps working with Telefonica’s O2, and sharing towers and build out with them in the same way that Orange and T-Mobile are sharing costs.
The TDtv system works by harnessing the unused TDD spectrum that came for data delivery in 3G licenses in around 50 countries.
It needs a transmitter, costing around $10,000 plus installation and tower rental costs, on around 30% to 50% of base stations, plus a $20 chip in each handset. It can be rolled out in accordance with where Unicast TV is in the highest demand, and the most popular TV channels that are already offered in Unicast can be moved to broadcast, taking the lion’s share of Unicast traffic. The top 8 channels of any given TV bouquet take upwards of 90% of all TV viewing.
The Bristol trial that the four largest UK cellular operators bought into showed that this spectrum can support 15 broadcast TV channels, so there would be room here for more than one operator to offer its own channels, with other less popular channels falling back to Unicast. IP Wireless actually says that the system could deliver as many as 28 TV channels, and with the rest in Unicast, that could lead to the 100 channel bouquet they are talking about.
If the operators were to be really aggressive they might dynamically select the leading channels per base station, and only fall away to Unicast when the TDtv channels were full, but our understanding is that this would take some planning and operator coding, but such a system has been tried and works in Hong Kong at PCCW.
The Orange and T-Mobile deal is being touted as a temporary move until 2012 when digital switchover happens. For about two years there has been an idea that Channel 36 in the UK could be freed up from air traffic control radar and the application moved to other available spectrum and DVB-H placed into UHF before 2012. However the cost of doing this has to include replacing all the radio equipment for the radar, and a period of running the two systems in parallel, before build out can take place. The longer this decision is put off, the lower its economic value, since it would only be worthwhile until UHF spectrum from digital switchover is auctioned. Chances are it is already too late.
The beauty of dealing with either the IP Wireless TDtv technology or DVB-SH, is that these systems cost comparable amounts to each other once a few hundred thousand customers are signed up, and this is way less than a DVB-H network, and the cellcos would be in complete control of subscriptions and advertising revenues, without partnering broadcast operators ‘ a task that is proving complex in many countries across Europe where they all want to run free to air services ‘ ignoring the cellco’s need for improved ARPU.
Virgin Mobile, now part of Virgin Media, is an MVNO on the T-Mobile network in the UK, and could be one of the outlets for any mobile TV service launched by T-Mobile there.
NextWave used the MWC show in Barcelona this week to announced the commercial trial and also launch a TDtv Device Integration Pack designed to make it easy to get started in TDtv. It offers a low-power TDtv card, a complete MBMS software stack, which is also required to drive TDtv, and the MediaFusion multimedia client software from PacketVideo, another NextWave company. The system will enable handset makers to deliver TDtv handsets to market in 2008
Meanwhile in Spain, ironically hosting the MWC show on mobile, the demonstration at the show for mobile TV is from Qualcomm using its MediaFLO system, but also using pure MBMS (this uses the cellular spectrum, not the TDD spectrum). Telefonica and its rivals in Spain may find that pressure to opt for MBMS or TDtv or the Alcatel DVB-SH system will increase as its neighbors have fully functioning broadcast mobile TV systems using DVB-H, a move that will continue to jeopardize the future of DVB-H.