Mobile TV may be the next frontier, moving the focus of entertainment from the family to the person, opening up new opportunities in this nascent sector.
Theatre and cinema ruled during the days of the social entertainment. Then came TV, converting audio-visual entertainment from a social experience to a family experience.
Now, after nearly half a century of dominance by TV-based living room entertainment, we are on the cusp of the next step -personal entertainment. “When it was introduced, everyone thought mobile TV meant people will watch TV on their phones as they traveled or moved around, but according to the information shared with us by a Korean operator, 60% of the viewing is taking place in the house,” says Sanjiv Kainth, who heads the South Asia business of Irdeto, one of the top conditional access and subscriber management companies in the world. Iredeto, part of the South Africa-based media giant Naspers Ltd, is one of the many technology solutions providers scouting around for opportunities in what is expected to become the second largest mobile TV market in the world, after China.
Irdeto is not alone. Other technology providers like NDS of Britain, Thomson of France and Nokia don’t tire of talking about the possibilities of live entertainment to the next dimension in entertainment - the mobile phone.
The arguments are familiar. At 240 million, there are twice the number of mobile phones in India as there are television sets. In addition, the number is swelling at 8 million per month, the fastest pace in the world and is expected to reach 500 million (50 crore) by 2010. The true magnitude of the number comes across when we compare it to the number of declared subscribers for satellite and cable TV in India - 12 million. Throw in the recommendations by the country’s telecom regulator framing the basic ground rules for the introduction of the service, the sector offers opportunities for both existing telecom and broadcasting players as well as new entrants with deep pockets.
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FIRST THE BACKGROUND
Mobile TV, in the form of video-on-demand, has been around for years in India. Short clips, usually of one to three minutes duration, are sent (streamed) onto mobile phones over cellular networks. But this form of video consumption, where each user requires a dedicated bandwidth, requires many tens of times of spectrum than is available in India. As a result, even where telecom operators have been courageous enough to offer it, the poor quality of service and the high prices have prevented the mass adoption of the service.
The Telecom Regulatory Authority of India (TRAI) has in January suggested that players should be allowed to start ‘broadcasting’ video to mobile phones, and not just stream them over data networks. In broadcast mobile TV, a fixed number of TV channels or videos are streamed at all times. Since the streams are not addressed to a particular person, any subscriber in the range can tap into it and watch it. As the same stream is tapped into by many subscribers, it places far lower stress on spectrum resources. For example, while 8 MHz of spectrum in the traditional one-to-one streaming can serve only around 25 to 150 subscribers per cell, depending on the technology; in broadcast, an operator with just 8 MHz of spectrum and just one cell can have thousands, even lakhs of subscribers. Broadcast mobile TV is able to support more subscribers as a cell can be as big as 25 kms in radius and adding extra subscribers within the signal area places no extra burden on the operator or his spectrum requirements, unlike cellular technologies.
SO, WHERE’S THE MAD RUSH?
You may be wondering why, if the prospects are so rosy, there aren’t already a dozen companies out there broadcasting for mobiles (and everything with a display and a receiver chip.) The reasons are mainly two - legal and handsets-related.
The first stumbling block is legal. In India, you need the government’s permission to start any service that involves the propagation of radiowaves, unless you do it a narrow range where there is the risk of interference.
Broadcasting services work well at frequencies of less than 1000 million cycles per second (1 GigaHertz or 1000 MegaHertz). For example, FM radio works around the 100 MHz frequency. Sadly, almost all the frequencies under 1,000 MHz is licensed in India. While this prevents interference, it also means that the government has to first come out with a policy of allotment of spectrum before private companies can secure it and start services.
This stumbling block is now in the process of being removed, with the government asking the TRAI to suggest a basic framework of rules for such services and the regulator giving its suggestions in January. While restricting only content producers from launching mobile TV, the TRAI recommendations, if accepted as it is, will ensure that only companies who can invest tens of crores of rupees can hope to enter the sector. This is because, according to the framework suggested by TRAI, any company winning the license will have to roll-out its network in at least one big city in the state where it won within 18 months. The regulator has also suggested that, to qualify, the applicant should have a net worth of at least Rs 3 crore.
The second stumbling block is the availability of a critical mass of handsets with built-in broadcast reception equipment, the market for the service. As of now, only three or four such models are sold in India and are all priced above Rs 17,000. Though mobiles with such tuners are sold in Korea for as low as $ 200 (Rs 8,000), the Korean vendors, Samsung and LG are yet to introduce such models in India. However, according to Nokia, the added cost of manufacturing a phone DVB-H (one of the broadcasting standards) reception feature is only 7 euros (Rs 400). The world’s biggest mobile-phone manufacturer has also announced its intention to make DVB-H a standard feature on most of its phones in the future, like it has done with FM radio.
“Mobile TV is not a critical service like staying in touch over the phone is,” points out Prashant Gokarn, partner with the London-based Spectrum Value Partners which provides consultancy services on telecom and related services in India and abroad. Prashant believes that the early success of the mobile TV start-ups will hinge largely on what happens in the handset market.
“It would be wrong to infer that since 240 million people are paying for mobilephone services, they will necessarily pay for mobile TV also,” he says. “Handset costs have to come down. The economies of scale achieved in markets like India will drive down the costs and the cost of putting mobile TV on the handset will go down from 10 dollars to 5 dollars easily,” he adds. “However, as of now, all the mobile TV chipsets are going into the high-end phones. Vendors haven’t come out with TV phones for the emerging markets,” he points out.
THE INVESTMENT
“There are three elements to a bare mobile TV network,” says Jatinder Duggal, Head - Broadcast, Rohde & Schwarz. “First is the head-end, which processes the raw feed, usually a
TV feed, into a format suited for mobiles. Depending on the technology, it can convert it into a DVB-H format or a MediaFLO format or a T-DMB format.
“Once the content is formatted, it is sent to the transmission network where it is modulated on a radio frequency carrier. This includes the high or medium power transmitters, with broadcast antenna hoisted on a tall tower. The third part are the gap-fillers/repeaters that strengthen the signal of the main transmitter and enable the reception of mobile TV inside buildings, “Duggal points out. In addition, the repeaters, which are synced with the main transmitter using GPS timing, have to be connected tothe output of the head-end of the main signal processing centre through fibre or satellite.
According to a survey of the industry officials, the head-end, usually one in each city, will cost around $ 1 million (Rs 4 crore), the transmission network, around $ 2.5 million (Rs 10 crore) and each of the gap-fillers/repeaters, which can be mounted on even cell-phone towers,around 0.25 million (Rs 10 lakhs).
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