Free article: Small operators have few viable options for mobile TV and radio broadcasting

Mobile TV and radio will increasingly be expected by consumers and will become must-have services for mobile operators. With early movers in Western Europe starting to offer broadcasting services, there will be strong competitive pressures on mobile operators to respond or risk losing market share.

Encouraged by feedback from trials, some operators may see mobile TV and radio as a substantial new source of revenue. However, trials may not provide sufficient information to gauge likely revenue from a fully commercial service, in a context where competing services may also exist. A realistic estimate of average revenue per service user for a fully commercial mobile TV and radio service is about EUR5 per month. Therefore the challenge for operators is to select a broadcasting technology and network deployment strategy that achieves a satisfactory financial return while delivering a service proposition strong enough to interest consumers.

Among mobile broadcasting technologies, the most likely candidates for deployment in Western Europe are DAB-IP, DVB-H, T-DMB and TDtv. In principle, there are many deployment options using these technologies but, for small operators, very few of these will be viable. To obtain an adequate financial return, small operators will have to share a DAB-IP or DVB-H broadcasting network with a significant number of other parties. This is illustrated in Figure 1, which is based on the results of financial modelling undertaken for our recent research report Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe. The figure shows the average monthly revenue per service user and the service penetration that a small mobile operator using a shared DAB-IP or DVB-H broadcasting network would need to have reached in 2016 in order to achieve a 15% internal rate of return (IRR) over the ten years from 2007 to 2016. This example assumes that the operator has a 10% market share.

Figure 1: Service penetration and average monthly revenue per service user required by a small mobile operator to achieve a 15% IRR using a shared DAB-IP or DVB-H network

But DAB-IP has drawbacks: it is only appropriate in the few markets where DAB has been deployed extensively and only a limited range of DAB handsets will be available. DVB-H is more likely to achieve significant global economies of scale and a small mobile operator can obtain a satisfactory return by sharing a DVB-H network with a number of other parties. However, high spectrum costs and use of L-band spectrum would considerably increase the service take-up and revenue required to make sharing a DVB-H network financially viable.

Operators implementing a mobile broadcasting solution must carefully select a strategy that suits their particular size and market. Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe examines various deployment scenarios for DAB-IP, DVB-H, T-DMB and TDtv, and explains which of these scenarios will be commercially viable for various operator types and circumstances.