Mobile Broadcast

1
Mobile Television An Overview Patrick
PfefferSeptember 26, 2007
2
Detecon at a glance
Detecon your international consulting partner
As a global firm Detecon International, we
leverage over 3,200 successful projects in more
than 120 countries.
Our Clients (Extract)
Detecon at a glance
Americas
Europe
Africa/MidEast
Asia/ Australia
Our Offices
Detecon Offices
Bonn

• Established
• 1954 Diebold
• 1977 DETECON
• Reorganized
• 2002 Detecon International GmbH
• Sales 2006
• 160 million
• 700 consultants

Zurich
Reston
San Mateo
Seattle
Mexico City
Abu Dhabi
Cairo
Johannesburg
Bangkok
Beijing
Note Engagements are subject to confidentiality
agreements. References are available on request.
3
Content
4
Market Potential
6
Mobile TV trend-scouting
The RGU market for mobile TV is much larger than
for fixed IPTV due to the large number of video
capable mobile devices.
DSL Cable Subscriptions (in M)
3G Subscriptions (in M)
Bobs Estimates
2006
2007
2008
2009
2010
5
Market Potential
4.580.000
Mobile TV value innovation
Like for IPTV, customers are not asking for
mobile TV. Operators must demonstrate value/price
ratio to market.
Value Proposition through innovation
Value Creation through content segmentation
Content
Download
Streaming
Core Requirements

• The service must be available outdoor, indoor
  and in moving vehicle
• Public channels and pay channels are a must,
  special channels desirable
• Radio must be available
• Wide coverage (urban, suburban and main roads)

On-demand
Carousel
Non-live
Live
Clips
Pay TV program
Video on-demand
Push and store
Subscription
Free TV program
6
Regulatory Issues
The gray zone
All regulatory bodies are playing catch up with
technology and early entrants are fighting
awkwardness of obsolete regulations. There are
regional differences.
Pressure points
7
Technology Options
Broadcasting technologies landscape DVB-H
standard gains momentum

Out of the large range of cellular, terrestrial
and satellite broadcasting technologies, some of
them are emerging as standards in different
regions.
Broadcasting technologies key facts


8
Technology Options
Mobile TV devices
The challenge here is to find the balance between
device cost, performance, form-factor and style
depending on the target customer segment.
Outstanding issues
Battery Technology and power management are two
crucial aspects to determine the success of
Mobile TV.
Integration of new DVB-H, DAB or DMB tuners and
channel decoders represents a significant
challenge both in terms of energy consumption
and components costs.
Application processors, RAM memory, GPS chipsets,
large and high resolution colour displays are
vital for high quality of service and end-user
acceptance.
Ease of use and large choice of different mobile
TV ready handsets are essential for the momentum
market take-up
9
Current Deployments
Status quo in early adopters markets
Mobile TV market dynamics are heavily influenced
by geographical characteristics and respective
regulatory frameworks.
In a nutshell
South Korea
Germany

• Struggle between paid service and free of
  charge scenario
• Pricing and handset affordability is a
  concern for user acceptance
• Wholesale approach with 25 revenue share
  for mobile carrier

• Regulatory muddle due to federal system
• Digital Right Management issues (GEMA)
• European Commission initiative promoting
  DVB-H

USA

• Market split between Video on demand
  subscribers and Mobile TV services
• MobiTV content aggregator approach is a
  success story
• Mobile TV over WiMAX is talked about for 2008

Japan

• Pitfalls of MBCo no alliance with mobile
  operator, purpose built devices,
  distribution strategy
• ISDB-T standard used for One Seg Service,
  no charging allowed by regulator

Italy

• DVB-H is predominant, take-up push by FIFA
  World Cup 2006
• High pricing with early adopters
• Wholesale approach by Mediaset to serve
  mobile carrier

Source DETECON Research and Analysis
10
Current Deployments
Italy
With 600K Mobile TV subscribers Italy is the most
developed European market. There are two mobile
broadcast networks. Interactive services are in
infancy.
Product Description
Interactive Services

• Two players H3G (vertically integrated) and
  Mediaset (wholeseale)
• Mobile TV offering to pre- and post-paid
  customers
• 20 channels available
• Pricing options daily (3), weekly (10) or
  monthly (10) basis
• Both Mobile TV platforms enable basic interactive
  services Channel subscription, ring tone
  download, and voting

logo
Voting at Mediaset
H3G Mobile TV w. channel subscription service
Player
Strategy

• H3G acquired Channel 7 thus owning its own DVB-H
  license. H3G has been the first MNO offering
  Mobile TV and interactive services
• TIM and VOD signed wholesale agreements with
  Mediaset. Mediasets channels can be viewed by
  both TIM and VOD UMTS/DVB-H subscribers

• Intense marketing campaigns
• MNOs want to merge IM-TV with existing UMTS based
  video services and further develop basic
  interactive services (e.g. betting, shopping,
  etc.)

Technology
Market Success

• Interactive platform is a proprietary solution,
  lack of standards
• DVB-H/UMTS integration enables a seamless
  interactive services
• Technology enables service subscription on
  handset
• Both DVB-H MUX cover 75 of country (outdoor)

• High penetration of 3G (EY 06) 21M
• H3G Mobile TV subscriber (including sporadic
  users (Mid 07) 500K
• TIM/VOD subscribers together (Mid 07) 100K

11
Current Deployments
Germany
Watcha is the first broadcast based Mobile TV
offering in the German market. It features only
limited interactivity.
Product Description
Interactive Services

• In 06 Mobiles Fernsehen Deutschland (MFD) has
  launched the first broadcast based Mobile TV
  service
• Channels ARD, ZDF, MTV, N24, a Pro7Sat.1 and a
  visual radio station
• Limited interactivity ESG, sent-in MMS as visual
  radio message, ring tone and music download (both
  BigFM), WAP based services (IFA show case)
• Trial Mobile soaps with SMS as reminder and
  content-elements

Sent-in MMS as visual radio message
Watcha Mobile TV offering
Player
Strategy

• MFD signed content partnerships with ARD, ZDF,
  MTV and Pro7Sat.1
• Partnership with Mobile Service Provider
  Debitel, Victor Vox, others. Together they amount
  25 of all mobile subscribers in Germany
• No partnering with MNOs (TMO, VOD, O2, EPL)

• MFD is positioning itself as a technology
  independent Mobile TV platform operator
• In competition to a consortium of TMO, VOD E-Plus
  and O2, MFD also pursues a DVB-H Mobile TV license

Technology
Market Success

• MFD uses DMB, broadcast technology based on DAB
• Technology enables WAP based backchannel
  integration
• MFD holds a nation wide L-Band license
• Coverage only in large metropolitan areas 16
  Mio. potential users

• Watcha Subscriber (Estimate) 7,800 (YE06)
• Monthly flat rate differs between 5 and 10
• Revenue sources Service subscription,
  advertisement and user interaction

12
Current Deployments
South Korea
Satellite-based DMB is threatened by free
accessible T-DMB. Combination with WiBRO for
interactive services.
Product Description
Interactive Services

• Pay-TV only (thus threatened by free T-DMB based
  Mobile TV)
• Large variety of channels Music, news,
  lifestyle, economy, traffic, local YTN, 1to1, U1
  Media (channels),
• Content 75 video, 25 audio
• One-time connection fee (20) and usage-dependent
  content fee (ARPU 20).

• KT telecom service using WiBro and DMB users
  will be able to retrieve information through
  WiBro in the background and display it on the
  screen (e.g. with Samsung M8000 extra receiver )

Player
Strategy

• TU Media (broadcast service company, SK Telecom
  owns 30) operates the countrys S-DMB network
• TU Media aggregates content and simulcast cable
  content
• 25 to content owners and 25 to MNOs

• Usage of Mobile TV popular in metropolitan areas
  for commuters, but limited to cell phones (larger
  variety at T-DMB possible)
• Average viewing time/day 62min (average world
  15-20 min, average Europe 2-3 min)

Technology
Market Success

• Geostationary satellite-based DMB, amplified via
  about 6000 repeaters in inaccessible areas
• Operate in 2.6GHz
• Repeaters work with Ku-Band at 12GHz

• Launch in May 2006, 1 Mio customers in Nov 06,
  Forecast 6,6 Mio user in 2012
• Still fast growing, but less than T-DMB, Total
  Revenue DMB 2007 forecast) 240 Mio
• High-priced handsets, questionable user exp.

13
Current Deployments
South Korea
Fast growing terrestrial DMB Mobile TV with free
access shows high growth rates. Some interactive
services.
Product Description
Interactive Services

• Service is free (Regulator)
• Revenue to be gained via customer retention in
  other offerings
• Service usage automotive devices (50 ),
  USB-Devices (30 ), mobile phones (20 )
• Seven DMB-TV channels, 13 DMB-Radio channels,
  eight data services (JPEG Slide Show, Dynamic
  Labeling, Wireless Service, Traffic Service)

Traffic information service on a PDA
Traffic information service via DMB
Player
Strategy

• Korea Telekom holds DMB license, runs network and
  defines channel portfolio (e.g. KBS, MBC, SBD,
  etc)
• MNOs take advantage of free DMB service and sell
  handsets
• Content providers (e.g. KBS, MBC) broadcast their
  channels free

• Usage most popular while commuting or at
  work/school
• Fast growth, but not profitable yet
• Many type of devices available

Technology
Market Success

• Domestic technology based on the DMB standard
  used by DTT and satellite broadcasting throughout
  Europe and Asia
• Runs at 12MHz (10 times more capacity than
  Germanys MFD)

• Launched in 2006, already 0,6 Mio users after
  four months
• Forecast 4 Mio users EY 06, 13,9 Mio in 2012
• Total Revenue DMB (2007 forecast) 240 Mio

14
Current Deployments
USA
Verizon markets Qualcomms MediaFLO broadcast
Mobile TV service. It enables very limited
interactivity.
Product Description
Interactive Services

• V Cast is a 3G network created by Verizon, used
  for broadcasting Mobile TV channels, video clips
  and music (e.g. CBS Mobile, Comedy Central, Fox
  Mobile, MTV, NBC, NBC News, Nickelodeon, etc.)
• Video content Music, Showcase, Comedy, News,
  Weather, Entertainment, Sports, Nets Best (e.g.
  You tube)
• Features Channel surf with no buffering,
  intuitive program guide, text reminders for
  favorite shows, call taking without interrupting
  program

Entertainment and weather on VCast
Player
Strategy

• Qualcomm owns the spectrum, runs the MediaFLO
  broadcast network and provides the service on a
  white-label basis
• Verizon purchased the MediaFLO service and
  integrates it into its overarching V Cast
  mobile entertainment platform

• Pull strategy Offering of popular channels
  attracts customers to services
• MediaFLO signed a Mobile TV wholesale agreement
  with Cingular
• Available in 35 states

Technology
Market Success

• Verizons V Cast service integrates unicast and
  broadcast technology
• Verizon Wireless Third Generation Wide Area
  1XEvDo network
• Data transmission at speeds of 400-700 Kbps and
  bursts of up to 2.0 megabits per second

• Commercial launch March 2007
• V Cast service costs 15/month (basic package) or
  25/month (select package) with unlimited basic
  video clips, access to mobile Web 2.0, unlimited
  airtime and email) limited package 13

15
Current Deployments
USA
MobiTV is a 3G Mobile TV service predominantly
available through Sprint and ATT. Many
interactive features available.
Product Description
Interactive Services

• Service offers both live streaming and on-demand
  video clips
• Mobile TV available in English and in an
  English/Spanish version
• Service offers more than 10 popular channels
  (e.g. MSNBC, ABC, CNN)
• Several interactive features Interactive
  advertising, Interactive M-Commerce (e.g.
  purchase ring-tone or ticket), Interactive
  Content Rating, Voting, Sharing Community

Sports and news on MobiTV
Player
Strategy

• MobiTV owns the service, defines portfolio and
  delivers the app
• MNOs (Sprint, Cingular, Midwest Wireless, nTelos,
  US Cellular, Cellular South) have signed
  wholesale agreements with MobiTV

• Pull strategy Offering of popular channels
  attracts customers to services
• MobiTV is likely to sign agreements with further
  MNOs

Technology
Market Success

• MobiTV supports multiple 3G network technology
  and hardware systems
• Compatibility includes several cell phones
  (Nokia, Motorola, Samsung Sony Ericsson etc.) and
  smart phones

• More than 1 Mio subscribers
• Fees vary depending on vendor

16
Conclusions

• Many technologies
• Handset drag down
• Various business models
• Cannibalization of IPTV ?
• Customer demand fallacy
• Content might not be too complicated
• Mobile TV 2/3G services
• Part of the bundle

17
Contact
4
Integrated management and technology consulting
worldwide
Patrick Pfeffer Detecon Inc.400 S. El Camino
Real, Suite 500 San Mateo, CA 94402Phone 1 650
401 5222 Fax [phone] Mobile [phone]
0471 Patrick.pfeffer_at_detecon.com