Mobile TV to remain niche in India

Despite its growth potential, mobile TV will remain a niche service in India due to several key challenges including high costs and lack of clarity in terms of revenue sharing, according to industry analysts.

There are over 670 million mobile connections in the country, where only 134 million out of 223 million households have television sets. The gap presents promising market opportunity for mobile TV.

Moreover, broadcasting regulator Telecom Regulatory Authority of India (TRAI) has approved the access of TV channels via mobile devices.

Yet, not much traction has been made in this market and analysts believe adoption will only pick up after three years, or more.

Neha Gupta, senior research analyst at Gartner, told ZDNet the sector will remain niche in the short- to medium-term. "We expect mobile consumers to be more interested in services such as e-mail and Internet than mobile TV," she said in an e-mail interview.

Smita Jha, associate director at PricewaterhouseCoopers, concurred: "Mobile TV is likely to pick up only after three to five years, once prices are brought down for mass consumption.

"Globally, two to three genres [on mobile TV] have been successful including news and sports, and general entertainment, which is usually shown as [pre-recorded] clips, called 'mobisodes'," Jha told ZDNet Asia in a phone interview.

State broadcaster, Doordarshan (DD), launched its mobile TV service, offering eight of its channels on the DVB-H (Digital Video Broadcasting - Handheld) technology. However, the service is currently available only in New Delhi, within a radius of about 12km. DD plans to roll out DVB-H services in 17 cities across India in five phases.

As of today, only DD is allowed to broadcast terrestrial TV for mobile handsets.

DVB-H compliant handsets are available from vendors such as Nokia and Samsung.

Consumers in India watch TV on their mobile phones using data cards, such as Tata Photon Plus, or through mobisodes--short video programs edited to be viewed on mobile phones.

Mobile users can access TV services either on a pay-per-view basis or a monthly subscription fee, said Diana Jovin, vice president of corporate marketing and business development at Telegent Systems. Telegent is a fabless semiconductor company that produces chips used to transmit TV content in mobile handsets and other portable consumer devices. The company is currently evaluating the Indian market and developing relationships with local brands, operators and broadcasters.

Consumers with handsets embedded with mobile TV receivers, allowing the devices to directly receive and display terrestrial TV broadcasts--either analog or digital--can also access free-to-air TV broadcasts. Such content are accessed independently from the mobile operator's network.

Mobile users can also choose to receive broadcast TV program on their handsets over dedicated mobile TV broadcast networks. They will have to subscribe to content offered by operators or other service providers that have invested in broadcast TV infrastructure, including spectrum, content licenses and transmitters, which operates separately from terrestrial TV infrastructure.

Gupta said: "So far, mobile operators offering TV services have had anything but an overwhelming response from consumers." In terms of subscribers, she noted that such services have proven popular in Japan where mobile TV is free-to-air, and in South Korea where operators offer a mix of pay- and free-to-air TV services.

She added that uptake in other countries has been modest.

Hindered by cost
For India's mobile TV market, however, cost of services remains the biggest challenge.

Nearly 96 percent of the country's mobile sector comprises prepaid subscribers who are primarily low-average revenue users.

Jha noted that in the short- to medium-term, mobile TV services are likely to be adopted by high-end post-paid consumers.

Even the launch of 3G and broadband wireless access (BWA) in India may have little positive impact on mobile TV takeup, she said. "Telecom operators would prefer to first use the 3G spectrum for voice services and, thereafter, for value-added services such as mobile TV," Jha said.

In India, spectrum availability and costs are a constraint.

Jovin said: "In most markets, we've seen very strong consumer uptake for free-to-air mobile TV but less substantial interest in subscription mobile TV offered over dedicated mobile broadcast networks."

Although Telegent perceived tremendous scope for free-to-air mobile TV in India, Jha differed. "Globally, there are not many success stories of full-blown live TV on the mobile phone," she said.

However, services such as video content delivered via mobile devices should pick up.

Gartner's Gupta noted: "Vendors are focusing on improving the browsing capability on their devices. We could see services such as YouTube picking up momentum and becoming the preferred way for users to enjoy video on a mobile device."

According to the analyst, such services give consumers more power so they decide the type of content they want to watch and how they want to watch it.

"This coupled with the fact that users do not need to subscribe to a separate service or acquire a specific TV-enabled device [to access mobile TV service], represents an attractive proposition," Gupta added.

However, issues concerning revenue sharing will first need to be ironed out.

According to Gupta, there is currently little clarity in India on how revenues generated from mobile TV, using the DVB-H, will be shared between broadcasters, content distributors and telecom operators.

Broadcasters believe they should take charge of the revenue because they are familiar with the TV business, have established relationships with content producers, and often have access to physical broadcast networks.

Telecommunication service providers, on the other hand, say they understand the business of mobile devices. They also have distribution channels for mobile TV receivers, which are often integrated into mobile phones, and have service contracts and billing relationships with mobile customers.

"Both parties need each other, and a successful mobile TV system will need a business model that benefits them both," Gupta said, noting that a revenue-sharing model will work best for this market.

Swati Prasad is a freelance IT writer based in India.