Reports came out this week saying that France has now delayed the launched of its DVB-H multiplex by more than 6 months, well into 2008. The only source saying so is UK researcher Screen Digest, which said that it has now had to revise its estimates now for European DVB-H implementation.
To us the actual delay seems a storm in a teacup. France was never going to get its service up and running in time for the Rugby World Cup held in France this year, as sponsors have said it would, time and time again. The timescales for deploying transmitters and gap fillers, complete with civil permissions for thousands of rooftop repeaters, meant it was always going to still be building out the service well into 2008.
In our own Rethink report, just released, called Mobile TV: Global Standards review and Forecasts 2007 ‘ 2011, we always had France beginning to sell subscriptions no earlier than in the second half of 2008.
But what’s more disturbing is the idea which Screen Digest floated that mobile operators and French Broadcasters are at odds over the business model to adopt. There is a natural disagreement here, and this idea flowered in Korea which had the first widespread take up of mobile TV through a combination of the satellite based S-DMB service from TU Media, and the government sponsored T-DMB service. S-DMB is a paid service while T-DMB is free to air.
The Korean mobile operators, especially SK Telecom, wanted a direct hike to ARPU by charging a monthly fee, just $17 or so, while the broadcasters wanted the whole service to be free to air and got the Korean Government to append that as a requirement to the T-DMB spectrum.
Nokia, the prime DVB-H technology sponsor, has been conducting surveys all over Europe for the past two years showing that consumers are prepared to pay a token amount, between $10 and $20 a month, to buy mobile TV, and two Italian services have been launched through three cellular operators there with a price tag closer to $30.
In general there has been consensus that Western Europe was always going to pay for its DVB-H services, as US subscribers would for the very similar MediaFLO technology, deployed by Qualcomm in the US, and sold by Verizon now and later to be sold by AT&T. Verizon offers this at a monthly price of $15 a month, and in bundles with streaming TV services that go upwards from there.
So the idea that the French broadcasters, likely to mean companies like infrastructure owner TDF, along with TPS, the Vivendi owned Canal Plus, France T’l’visions, Arte-France, Bouygues controlled TF1, M’tropole T’l’vison and RTL Group, many of which took part in the DVB-H French trials, are against charging, is quite a sudden and surprising outcome and we’re not sure we believe that Screen Digest has this right. If true it will create a serious breakdown in negotiations and could potentially stall the market for far longer.
In Europe so far, Austria is the only country which has announced a free to air mobile TV service, but this is just for one year while it tries out the service and gets people used to it.
TDF already owns Digita, the Finnish broadcast operator that won the contract for delivering a DVB-H multiplex across Finland, and although the build out of that is going ahead, it has always been envisaged as a paid for service, or partly paid and partly free. Currently the Finland network has been delayed due to copyright red tape on programming, but surely if TDF was against the idea, it would have said so some time before. Discussions are reported to have gone on in deadlock for six months, with no progress.
One of the problems with DVB-H is that the actual broadcast infrastructure owners, like TDF, are at a distinct advantage. And where they have contracted their services to broadcasters, they confer that advantage on broadcasters. The classic way to set up DVB-H services is to use a large DVB-T antenna for each city and just plug in a new DVB-H modulator and a DVB-T to DVB-H converter, and use existing power sources and cabling. This mitigates the costs by a substantial amount, and only gap fillers are needed in surrounding towns. The reach of such an antenna is around 20 kilometers in each direction for DVB-H.
The cellular operators have no control over this part of the equation and the entire DVB-H standard must come into question if there turns out to be a broadcaster rebellion in France, especially as the same broadcasters own properties all over Europe and may adopt the same attitude.
The cellular operators in frustration could immediately drop DVB-H and opt for the Alcatel controlled satellite based DVB-SH, which uses S-Band spectrum and which works by installing terrestrials repeaters alongside cellular towers, which gives all the control to cellular operators, but leave them with the issue of acquiring content.
Germany also has problems with its proposed DVB-H service, where the consortium of leading cellular operators are trying to buy the allocated DVB-H spectrum, and are now being investigated for anti-trust by the German Cartel Office. All of this suggests that Italy will continue to be the flag waver for DVB-H mobile TV for the next 12 months in Europe, at least.