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By William Patalon III
Money Morning/The Money Map Report
The market for mobile TV services in India will reach $360 million this year, as an estimated 12 million consumers sign up for this new entertainment offering in its first year of existence, market researcher Springboard Research announced in a new study released this week.
According to the report, "Mobile TV in India: Understanding the Mobile Entertainment Needs of Indian Users," mobile TV could achieve a penetration rate of 5% to 6% of the total mobile-communications subscriber base in India this year. This is the first year that mobile TV services are being offered, says Springboard, a top provider of advisory services on new and innovative information-technology products and services.
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"The market is ripe for the launch of mobile TV services and we believe that India will have around 12 million mobile TV subscribers within the first year of launch of service," Ravi Shekhar Pandey, Springboard's manager of syndicated research, said in an. "Mobile telephone operators will have an advantage over standalone mobile TV operators in that the former already have users subscribing to their value-added services. However, the success of either operator will be dependent on content offered and price charged for the service."
Subscription-based mobile TV is available in the United States, through such services as the V-Cast Mobile TV service offered by the Verizon Wireless unit of Verizon Inc. (VZ), or the MobiTV service offered by Cingular Wireless, now a unit of AT&T Inc. (T). However, those two services are each unique to their respective carriers, since the two companies employ different wireless technology standards. The Cingular service debuted in 2006, while V-Cast first became available in 2007.
When it comes to tech-based products and services aimed at the consumer market, Asian countries tend to be the world's "early adopters" – with such wares appearing in markets like Japan, Korea or India months or even years before similar offerings appear for sale in the U.S. market.
Japan is typically the best example of this trend. Take global-positioning systems. Consumers and cab-drivers were adding portable GPS units into their cars as early as the middle 1990s; those same products didn't really make a splash in the U.S. market until the early part of this decade, and it's only been in the past couple of years where the prices have dropped to the point where they're becoming a ubiquitous add-on, or where automakers are offering them as an option on new model cars and trucks.
Indeed, among the many things that the Japanese metropolis of Tokyo is known for is the "Akihabara Electric Town," a massive gadgets bazaar that's a 10-minute train trip from the downtown. A bustling, overcrowded community before World War II, the area was wiped away by a fire and kept clear – eventually evolving into what many believe is now the largest concentration of electronics vendors anywhere on earth.
One of the town's early claims to fame was for being the home to one of the first stores devoted to personal robots and robotics. Western tourists who visit Japan invariably visit Akihabara, and are typically stunned to find electronic products that aren't available in their home market – and that don't actually show up there for months or years.
India's mobile-TV services are yet another example of an innovative, tech-based service that many American consumers have never even heard of.
In India, public-service broadcaster Doordarshan is the only company currently offering limited mobile TV service. Nokia Corp. (NOK), Spice Communication's Spice Telecom unit, U.S.-based Qualcomm Inc. (QCOM) and South Korea's Samsung are few of the stakeholders actively promoting the adoption of mobile TV in India.
In its report, market-researcher Springboard recommends that mobile-service providers should offer an "on-demand" pay-per-view option that does not bind users to a monthly subscription for mobile TV. Springboard also concludes that a close collaboration between mobile operators and broadcasters will create a profitable business model for mobile TV service in India.
That model makes sense, since "mobile TV marries the two dominant consumption trends of entertainment and mobile telephony in India," said Pandey, the Springboard Research manager.
In the U.S. and European markets, mobile TV has so far been a "mixed bag," according to a new study. The business potential is very large – an estimated $270 million in the next 12 months – but only if carriers can improve the quality of their offerings and the reliability of their service, both of which have been less than satisfactory.
The so-called "M: Metrics Study," commissioned by networking leader Tellabs Inc. (TLAB) – and released at the "Mobile World Congress" in Barcelona back in mid-February – found that the mobile TV market grew at an impressive 36% in 2007. However, the population of "former" mobile TV subscribers – those who cancelled out of dissatisfaction or other reasons – grew at nearly double that rate (68%).
However, the study also found that 60% of the former subscribers say that they would pay to watch mobile TV again if service quality and reliability significantly improved in the coming year. And by regaining just half the potential market lost due to those quality and reliability issues, mobile operators would achieve the $270 million revenue target, the study concluded.
At the Mobile World Congress, carriers were looking at market opportunities, crucial at a time when such things as airtime have become little more than a commodity service whose success or failure turns largely on service quality and price.
"Users decide which new services succeed, not the industry," said Tellabs Vice President Pat Dolan. "It's challenging for operators to make a living as mere pipe vendors. By offering mobile content users enjoy, operators can increase revenue. Yet this necessitates network enhancements, as acceptance of high-bandwidth services depends on the quality, reliability and capacity of the mobile backhaul. Tellabs is working with many operators in addressing these issues, and we are confident the industry will progress further."
According to Tellabs, the research that it commissioned on Mobile TV users' attitudes was conducted in the United Kingdom, Germany, Italy, France, Spain and, for the first time, the United States.
News and Related Story Links:
International Business Times (India):
Japan Travel and Tourism:
Akihabara – Japan's Electronic Shopping Capitol.
Cingular launches mobile-TV service.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.