As local broadcasters MultiChoice and etv celebrate the issuing of their much anticipated mobile TV licences, industry insiders are less than confident of the offering's success in SA, or even around the world.
Last week, the Independent Communications Authority of SA issued high-frequency radio spectrum licences for mobile TV offerings for 40% capacity to etv and 60% capacity to MultiChoice.
This comes as controversial application processes left etv and MultiChoice unrivalled for the spectrum, a situation that leaves much to be desired for competition in the market.
Independent telecommunications analyst Richard Hurst says the invitation to apply for the spectrum should have been opened up a little more to ensure a more competitive market entry.
He argues that the situation of only two licensees may lead to a duopoly scenario and, considering etv's willingness to become part of MultiChoice's DStv bouquet, it may result in a monopoly in the market.
However, World Wide Worx MD Arthur Goldstuck offers a contradicting, but bleak, view. “Considering that we faced a situation, just three months ago, where only one licence was likely, and that the best candidate had been disqualified on a ludicrous technicality, in comparison the situation now represents a best-case scenario.”
Having received their licences, both broadcasters are now committed to rolling out full-capacity services within 12 months; however, analysts question both the short-term and long-term success of the offering.
Unlikely success
In the short-term, mobile TV will have little traction in the market, maintains Goldstuck. According to the 2009 Mobility survey, conducted by World Wide Worx, less than 1% of the mobile market in SA is keen to take up mobile TV as a service.
Goldstuck explains that this is largely a result of the long delays and failure of the regulator in the past. “With good programming, good marketing and good pricing combined, with handset availability and an end to regulatory sloth, it may well take off. However, that amounts to five key factors, and it remains to be seen whether all five can be delivered in the short-term.”
Goldstuck argues that, in the longer term, mobile TV may become “taken for granted” as an alternative viewing platform when people are out of reach of TVs.
“But that also highlights the great flaw in mobile TV business models: it will never be a preferred viewing channel for general programming, and must always play second fiddle to a standard TV set in a home or place of entertainment,” he maintains.
Hurst concurs, arguing that if the user perception of mobile TV is considered, it is likely that the offering will be used for quick sports highlights, news and possible video clips. It is unlikely that a mobile user will use his cellphone to watch a TV series, he argues.
WWW Strategy MD Steven Ambrose notes that mobile television has not really taken off anywhere. Users are far more likely to get video-on-demand from more traditional Web services, like YouTube, than to subscribe to a streaming service.
Mobilising plans
Although analysts remain sceptical of the overall success of the offering, there is consensus that both etv and MultiChoice will be able to deliver a mobile TV offering.
“Ultimately, mobile TV will be about programming and marketing rather than technical prowess, and it is clear both parties have the ability to deliver on both those scores.
“MultiChoice has been researching and developing their mobile TV service for years, so there can be little doubting their ability to deliver,” says Goldstuck.
Nolo Letele, CEO of MultiChoice SA Group, comments: “The various building blocks to launch the service commercially are being put in place, the most significant being the integration of DVB-H technology into a meaningful number of cellphones. This is expected to take time as the technology will be integrated into new-generation handsets.
“To date, we have already invested R300 million in experimentation with mobile broadcast technology and network infrastructure. We will expand on this investment in the construction of an extensive broadcast network."
Says Goldstuck: “Etv, on the other hand, does not have a legacy in this area, but has shown its eagerness to become a multi-channel broadcaster through its 24-hour news service and willingness to be part of the DStv bouquet.”
Hurst agrees and is confident that etv will surprise the market with a solid offering. An official launch date from both broadcasters is expected to be announced in due course.
Related story:
Mobile TV dominated by MultiChoice, etv
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