Too much hype over mobile TV

February 24, 2005

Strategy Analytics' Wireless Internet Applications service released, "Mobile TV: Hype not Justified by Demand!" arguing that the vendor-led rush to bring broadcast services to market misses the critical issues of uncertain demand for mobile TV. Additionally, poorly defined costs associated with infrastructure deployment will extend ROI for mobile broadcast networks beyond the currently envisaged two to four years.

Even though services will not launch in Europe and North America until the end of 2006, Mobile TV services, which allow users to watch digital TV channels on their mobile phones, is already the hot industry topic of 2005. Across the globe, numerous trials are being announced to evaluate whether standards and technologies from the world of digital broadcasting can be adapted and married with mobile cellular services for access through converged handheld devices.

Strategy Analytics believes that the momentum that has been rapidly built behind mobile broadcasting is unfounded. "Consumer demand for paid for Mobile TV remains highly uncertain, and we remain unconvinced that consumer appetite for mobile TV services exists outside of niche segments," according to Phil Taylor, Director, Strategy Analytics Global Wireless Practice. "Operators have the perfect opportunity in 3G to see if mobile video services will fly, without further extending themselves into the provision of broadcast services.

David Kerr, Vice President, Strategy Analytics Global Wireless Practice, adds, "Beyond the basic business case and potential cannibalization factors, mobile TV faces four key challenges: The technology roadmap is far from stable; regulation and low spectrum availability may also act to slow the spread of services; beyond the technophile segment there is slow diffusion of media-enabled devices; and uncertain revenue models and value chain reconciliation will deter content industry participation."