Qualcomm Inc. snared its first customer for MediaFLO last week, as Verizon Wireless said it will use the chipmaker’s new network to broadcast live TV to subscribers.
The nation’s second-largest carrier announced plans to use the $800 million network to offer live mobile video services in about half of the markets already covered by its CDMA2000 1x EV-DO network. Verizon Wireless will be the first U.S. operator to use MediaFLO, which is set for commercial deployment late next year.
However, Verizon was careful not to commit to launching its new video offering the instant Qualcomm brings the network online.
“Qualcomm expects the network to be commercially available by the end of 2006,” Verizon Wireless spokesman Jeffrey Nelson said. “Obviously, that’s necessary but not sufficient for us to launch service.”
The real-time video broadcasts will be available to users with MediaFlo-enabled CDMA2000 1x EV-DO handsets. Verizon Wireless said it will expand service to other markets following the initial launch.
The operator already delivers on-demand video through its Vcast service but has yet to offer live TV.
“Our success in the marketplace over the last year with Vcast really has opened our eyes to the possibility of succeeding with live TV,” Nelson said. “We envision the MediaFLO service to be complementary to Vcast.”
The move marks a huge win for Qualcomm, which is rolling the dice by building a one-way, high-speed network using its own spectrum. The chipmaker hopes to allow carriers a way to offload data-heavy video services onto a dedicated network, preserving cellular infrastructures for other on-demand video, voice calls and Internet access.
“We’re still talking to all the carriers” about MediaFLO, said Dr. Jeff Lorbeck, senior vice president and general manager of MediaFLO. “(The network) can scale almost without limit. Everything we’ve designed about MediaFLO assumes mass-market adoption.”
Lorbeck declined to disclose vendors providing hardware for the effort, but said that TV broadcasting providers-not traditional cellular companies-are building out the network. Transmitters will feature much higher power than cellular transmitters and will be placed atop leased towers as tall as 1,000 feet. A typical market will require only three transmitters, Lorbeck said.
“This is a very different network,” Lorbeck said. “(It will use) a small number of high-powered, tall transmitters. They look more like TV transmitters than wireless.”
Meanwhile, Crown Castle International Corp. is working with Nokia Corp. on a competing network it hopes to launch next year using DVB-H technology. European operators including Vodafone Group plc and O2 plc are testing DVB-H mobile TV networks in Europe.
While Crown Castle has yet to announce a carrier customer for its network, Verizon Wireless’ announcement may spur other U.S. carriers to partner with one of the two dedicated networks quickly.
“We believe (Crown Castle) will likely announce carrier partners in the near future,” CIBC World Markets Corp. wrote in a research note Thursday. “We note that the MediaFLO network would not necessarily be limited to Verizon and could be offered to other U.S. wireless carriers.”
CIBC estimates MediaFLO mobile TV service could generate as much as $10 to $15 in monthly ARPU, with Qualcomm subsidiary MediaFLO USA Inc. receiving 10 to 15 percent. Verizon Wireless currently charges $15 per month for access to its Vcast service.
MediaFLO could boast nearly 30 million North American subscribers by 2010, CBIC added.
