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Caution Required for Mobile Pay TV Market

Strategy Analytics released a report which concludes that the current hype surrounding broadcast mobile TV services remains out of proportion to evidence of consumer interest and willingness to pay.

Demand for mobile TV in the short to medium term will be met adequately by carriers as they upgrade their networks to HSDPA and introduce 3G multicasting technologies such as MBMS/BMCS. Consequently, a rush to heavy investment in new digital networks cannot be justified.

Developments in mobile digital TV continue to be driven by the vendor community. The arrival of DVB-H and DMB handsets and networks into the market is forcing carriers to evaluate strategic positioning in this nascent area through a number of trials and pilot schemes.

Senior Analyst, Nitesh Patel, states, "Although a large proportion of the carrier community is assessing DVB-H, T-DMB, and MediaFlo, their motivation is out of fear and uncertainty rather than opportunity. Network operators should control service delivery over their own infrastructure, since demand can be met adequately by cellular based multicast technologies such as MBMS, when it becomes available in 2007. However, the window of opportunity for MBMS will be limited, given that dominant handset vendors Nokia and Samsung are aggressively pushing digital broadcast technologies today."

Strategy Analytics predicts that the mobile TV format battle will eventually be won by DVB-H, ahead of DMB and Qualcomm's FLO. Vice President, David Kerr, adds, "DMB based deployments have taken an early market lead in Korea, where the technology has originated. However, as carriers in Europe, North America and the rest of Asia - excluding Japan - begin to launch digital TV, we fully expect DVB-H to win, given its position as a standard, and because of the widespread support it has attained from carriers, the handset vendor community and regulatory bodies. We also believe that Qualcomm's FLO will struggle to gain traction outside the US market, despite being a superior technology to DVB-H, while in Japan ISDB-T will be the dominant format for terrestrial mobile TV".

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