Qualcomm Inc., Crown Castle International Corp. and Aloha Partners LP are each spending hundreds of millions of dollars to build dedicated networks for multimedia mobile content. And, analysts say, one of them is probably going to lose.
Consumers will flock to mobile television services in the next few years, according to two studies released last week. ABI Research predicts more than half a billion users worldwide will subscribe to mobile wireless TV services by 2011, up from only 6.4 million at the end of 2005. Figures released by In-Stat echo ABI’s findings, indicating 102 million users worldwide will access mobile video through wireless broadcasts as opposed to cellular networks.
Only 3.4 million consumers watch mobile TV broadcasts currently, In-Stat said.
“Recognizing that using cellular networks to deliver content that millions want to watch simultaneously requires much greater bandwidth than is currently available,” In-Stat said. “Carriers are turning to mobile TV broadcast networks, which have a much lower cost per bit for video delivery.”
But the news isn’t all good for the three new networks, ABI warned. While the future for Qualcomm’s MediaFlo looks bright, the market likely cannot support both Crown Castle’s Modeo and Aloha Partners’ Hiwire.
“Most markets will not be able to support more than two broadcast networks due to the high cost of building them, and the fact that most markets only have three or four major mobile operators selling wireless services to subscribers,” said Ken Hyers, an ABI principal analyst. “Modeo and Hiwire are competing for the business of just three major operators, and one of them will fail.”
MediaFlo is the only company to have scored a carrier deal-Verizon Wireless last year committed to using the service-and Qualcomm’s effort is expected to be the first player on the field when its $800 million network comes online later this year. Crown Castle and Aloha Partners are each spending about half a billion on their new networks, both of which are expected to launch next year.
Hiwire owns two channels of 700 MHz spectrum-the same bandwidth MediaFlo will use-in 80 of the top 100 U.S. markets, allowing it to offer about twice as many channels as its competitors. And because the spectrum was designed for traditional television broadcasts, Hiwire’s signal will have more reach and provide better in-building coverage than the 1.7 GHz spectrum Modeo plans to use for its service.
Modeo, on the other hand, can come to market before Hiwire, noted Michelle Abraham, a principal analyst at In-Stat.
“One of the advantages Modeo has over both Hiwire as well as MediaFlo is the spectrum they have here is available nationwide today,” Abraham explained. “The others need to wait until that spectrum has been vacated by the TV station that was using it.”
Of course, it’s possible that carriers could partner with more than one mobile TV provider to gain better coverage and increase the number of offerings. It is technically possible to build dual-network handset that could access both Modeo and Hiwire broadcasts, which are both based on digital video broadcasting for handheld technology. MediaFlo is a technology unto itself-Flo stands for “forward link only”-although Qualcomm plans to hedge its bets and develop chips based on the DVB-H standard.
But cross-network viewing could require Hiwire and Modeo to employ interoperable media players and digital rights management technology, making such a scenario improbable. And analysts say carriers aren’t likely to embrace more than one of the new networks until mobile TV begins to gain mass-market traction, which could take years.
Meanwhile, Modeo and Hiwire are scrambling to get at least one of the remaining major operators in the fold. Failure to find a Tier 1 partner in time could seal a network’s fate even before it comes online.
“It all depends on whether (Hiwire and Modeo) are successful in signing up the carriers,” said In-Stat’s Abraham. “They need partners, but so far they haven’t announced any.”
