The Broadcast Mobile Convergence Forum (BMCO) has created a last ditch alliance to save DVB-H in Europe, pulling together as many backers of DVB-H to create a guaranteed market for cheap DVB-H devices. The aim is to bring at least a handful of popular devices to the European market by next Summer when the World Cup begins in South Africa.
It is well known that the South African Government is desperate to get mobile TV up and running in time for the World Cup, and has just put up temporary licenses for grabs. Whoever takes them on will have to build a network in the main stadium cities inside six months. The only company with the understanding of DVB-H and the existing antenna sites is Naspers subsidiary Multichoice, which runs pay TV service DStv and we would expect it to bid for the temporary license and use that to leverage a long term license for South Africa wide mobile TV.
But companies like DStv and others in Europe have been lobbying for affordable DVB-H phones for the past two years with no response from handset vendors, who insist that minimum orders must be in the order of 100,000 handsets per design. BMCO officials at a recent Mobile TV summit told us that it needed to pull together a buying club to bring more like 5 handsets to market and that this would mean pre-orders in the region of 500,000.
Now it has done just that, with 15 service providers and broadcast network operators from around the world working through the BMCO to unify handset demand to speed up device introduction. While it has not explicitly said that this could lead to half a million device orders, we reckon that this is exactly what’s up for grabs, at the very least, more likely double that number.
Members of the initiative include DVB-H players who can speak on behalf of Austria, Germany, Italy, Poland, Hungary, Russia, Nigeria (and by association the rest of Africa including South Africa), Finland, Poland, the Netherlands and the Philippines.
The companies in these regions include 3 Group, Orange and Media Broadcast, Antenna Hungaria, Dominanta and Kentavar from Russia, DStv Mobile, Safaricom, Digita, INFO-TV-FM, KPN and Mediaquest and Smart from the Philippines.
Nokia recently brought out a new DVB-H device, the 5330 which brought the price of DVB-H down to €155 ($233), which is still seen as far too high a price to support a service launch. This device could form a ceiling price, with perhaps another 4 devices filling out the cost range from $100 to $233. What the BMCO really wants are existing popular devices with larger touch screens adapted for DVB-H viewing.
All the companies involved have jointly signed a letter that requests the update of mobile phone roadmaps and an offer to discuss the development of common handset requirements based on BMCO published profiles. Although it looks like a call for a roadmap, it is likely that this is really a co-ordinated buying club and a place to negotiate up to a million device purchases.
The BMCO states ‘Within the bmcoforum the companies also agreed on actions which will support the vendors in the introduction of new devices in their markets,’ and while this sounds unspecified, it is clearly a quid pro quo basis for negotiation. A tasty morsel like an order of that magnitude could tempt any of the up and coming handset vendors such as HTC or ZTE or even the bottom end of the top five ‘ Nokia, Samsung, LG, Sony-Ericsson or Motorola.
‘Mobile TV is for a mass market audience which needs to be served by a wide range of attractive devices,’ said Marco Visser, Director KPN Mobile, The Netherlands.
‘The FIFA football world cup 2010 may give a push to mobile TV usage across the African countries in which we operate. For that we need affordable devices with integrated DVB-H receivers,’ said Francois Theron, CEO, DStv Mobile Africa.
The truth though is that in South Africa there is only an opportunity to sell perhaps 200,000 devices during the World Cup if they are high priced and no-one knows how many if they come in at a reasonable price (this is the same number of CMMB devices which sold at the Olympics in China, when they were high priced items). The same is the case where devices are sold mostly unsubsidized in places such as Russia, Poland, Hungary and the Philippines. It is the major European operators such as Orange, 3 and KPN which can subsidize and therefore promise orders backed with their own money. T-Mobile, which is NOT named as a member of this group, might also do so in Germany if it takes over the DVB-H license there with Media Broadcast, now a subsidiary of TDF.
We wonder if device manufacturers will be keen to announce partnerships with such a group, or if a deal will be done quietly under the table which emerges next Summer.