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Why Mobile Over-the-Top Video Will Thrive

Looking for growth in the U.S. telecom sector? The market for mobile video infrastructure will experience very rapid growth rates in the near future -- in spite of the economy, according to the latest market study by In-Stat.

There are many ways to deliver video content to mobile devices -- some of these require mobile video-specific infrastructure, such as broadcast out-of-band video services and cellular in-band video services. Others, like Internet access and digital terrestrial broadcast TV, utilize infrastructure in place for other video services.

"In spite of the present economic turmoil, consumer interest in mobile video is growing, and service providers must build infrastructure to be in position when consumer demand recovers. Europe is the largest region for transmission revenue due to the number of countries that have launched, or plan to launch, mobile-specific out-of-band broadcast networks," says Gerry Kaufhold, In-Stat analyst.

"Mobile video headends will drive growth for encoders and transcoders to support an increasing number of video channels and display sizes. When the Mobile Internet hits its stride, we'll see online videos being re-purposed for mobile devices."

In contrast, I'm skeptical about the revenue upside for carriers. I'm wondering if the significant mobile video opportunity is ultimately destined to be over-the-top delivery that doesn't include a revenue split with mobile service providers.

Does Hulu.com, as an example, really need a mobile carrier relationship in order to succeed with mobile phone consumers? I think not. Unless of course, the carriers attempt to block video content that resides outside their walled gardens. Barring that anomaly, over the top delivery will thrive in the U.S. market.

In-Stat's market study found the following:

- The U.S. is expected to remain on track to begin deployments of ATSC Mobile and Handheld (ATSC M&H) services during 2009, into 2010, and beyond.

- In Brazil, deployments of ISDB-T will begin, and ISDB-T supports a built-in mobile service called One Segment (One Seg).

- DVB-H deployments will continue globally, country by country.

- MediaFLO build out will be limited mostly to U.S. markets.

- Mobile video infrastructure revenues will reach $291 million in 2012.

- Transmission network build outs generate more revenues than mobile video head-ends.

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