Analysts split over future of mobile TV

Mobile TV is a key strategy in getting users to pay more for the use of their mobile phones

BT and Virgin Mobile will start broadcasting television to mobile phones this summer, but analysts are split over the commercial prospects of the technology.

Network operators are still struggling to pay off the billions spent on 3G licences, and mobile TV is seen as a key strategy in getting users to pay more for the use of their mobile phones.

But fears over competing standards, pricing and consumer acceptance have led some analysts to temper expectations of instant success.

Adrian Drozd, senior media and broadcasting analyst at Datamonitor, said: " We take a conservative outlook for mobile TV.

"Growth may be limited by the problems over spectrum allocation, the high price of handsets, consumer unwillingness to pay an extra $10 a month, and operators wanting to push 3G video services, not broadcast TV, to mobile services."

Drozd added that four separate broadcast technologies are currently competing in the marketplace: DVB-H, DMB, MediaFLO and ISDB-T, the last of which unlikely to gain any traction outside Japan. The UK service will use the DMB standard, which is also used in South Korea.

Datamonitor has created a conservative forecast for the adoption of these services and is expecting 69m global subscribers in 2009, generating revenues (although not necessarily any profits) of $5.5bn.

But other analysts are less concerned about the technology behind the services, but focus on the content it carries.

Informa has just released a report which suggests that content will be the deciding factor in the success or failure of mobile TV, and that network operators may not get the returns they are expecting.

"Although mobile operators have the most at stake, they may not necessarily be the real winners from the provision of mobile TV and video in the long term, " said Helen Ponsford, the author of the report.

"Rather, it is the content owners that are best placed to capture the lion's share of the revenue, not least because they can take advantage of their control over mobile broadcast rights to ensure that distribution of content is on their terms rather than the operators'."

However Ponsford predicted that in the long term mobile TV will become as ubiquitous as broadcast TV services to the home today.

The limitations of the handsets will need a different type of broadcast programme, but mobile television will be a success if this is done correctly, he added.