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More Predictions Point to Mobile TV Windfall

Defining the market potential of a new service offering, particularly in the absence of a compelling consumer value proposition, is sometimes like the child's game -- pin the tail on the donkey. Regardless, if you are a mobile service provider that needs to rationalize a significant investment in 3G infrastruture, then it's encouraging when you can point to 'research' as validation.

In 2011, mobile TV services will have some 514 million subscribers worldwide, up from only 6.4 million at the end of 2005, a new ABI Research study has found.

The fledgling market for mobile television is beginning to build significant momentum, according to the report, "Broadcast and Unicast Mobile TV Services," and advertising-supported broadcast services are expected to propel additional growth over the next few years.

"Broadcast will be the preferred method of access to mobile video for most people," says principal analyst Ken Hyers. "Unicast will remain part of the mix, for customers who want to access video-on-demand, but ABI Research believes that the majority of subscription services will be for broadcast content, and that unicast-only subscriptions will not be a significant part of the market."

South Korea and Japan are the early adopters, but European and North American markets are not far behind, with three contenders planning to introduce mobile video broadcast services in the United States over the next 12 to 18 months. MediaFLO (Qualcomm) plans to be first off the mark, having announced its intention to launch services in the fourth quarter of 2006; Hiwire (Aloha Partners) and Modeo (Crown Castle) will follow suit in 2007.

But Hyers cautions, "Most markets will not be able to support more than two broadcast networks due to the high cost of building them, and the fact that most markets only have three or four major mobile operators selling wireless services to subscribers."

What will determine which broadcasters survive in any given market? The most critical factor will be commitment from mobile operators. "MediaFLO has been built for this purpose from the ground up, and will almost certainly be among the winners in the US," Hyers believes. "Verizon Wireless has already committed to it. Modeo and Hiwire are competing for the business of just three major operators, and one of them will fail. Each has strengths and weaknesses. Modeo plans to be faster to market, and if it signs a major operator quickly, its battle is half won. On the other hand, in Hiwire's favor is its large (12 MHz) and valuable swath of spectrum with more favorable characteristics than Modeo's."

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