Mobile TV To Hit Mass Global Viewers in 2008 Says An Ericsson executive, But A New Survey Indicates That There Is A Weakening Interest In New Mobile Technologies With Pricing The Main Culprit

Philip Stone November 26, 2006

An Ericsson executive boasted last week that about one-third of the world’s mobile phone users could be watching TV on their handsets within two years, but he may not have read a new study that indicates a weakening customer interest in new mobile technologies because of cost. If mobile vendors want customers to use their phones for more than just talk then they need to embrace low-cost fixed-price plans.

Ericsson and Sony executives caused a stir in Stockholm last week with their very bullish outlook on the future of mobile TV. Per Nordlof, Ericsson’s director of Product strategy, said, “We see a mass market (at least 30%) for mobile phone TV within two years.” Ericsson and SONY took the occasion at the new conference to announce further cooperation between the two in addition to the Sony-Ericsson joint venture in making mobile phones.

The new ventures play to the strengths of both companies, said Eric Siereveld, Sony Europe’s director of professional solutions.  He noted Ericsson was the world’s leader in providing mobile TV networks, and Sony has a lead in home electronics. The companies see bringing those expertises together as a natural extension of their relationship on such home entertainment projects as sending still and video between a regular TV and a mobile phone.

But that bullish outlook is soured somewhat by a new study just released by TNS Technology about customer resistance to using their mobile phones for anything other than talk. Some 23% of respondents cited cost as the main obstacle to using 3G, 21% won’t even download songs to their mobiles because of cost, 23% said they won’t even surf the internet on their mobiles because of cost, and 22% say cost puts them off using Wi-Fi.

And the major problem seems to be charging based on usage. People do not like being charged per kilobyte used, or each time a service is accessed.  The obvious solution – fixed price plans.

“Given that cost is such a key obstacle to the adoption of more advanced mobile services, mobile operators must provide pricing regimes which are fixed for unlimited use, transparent and affordable,” said Harris Harun, global director, TNS Technology. “Cost is the quick fix and should provide fast usage uplift especially amongst those services already found interesting by consumers, such as songs downloads and real-time TV,” he concluded.

Live sports has long been thought of as a main attraction for mobile TV. In Australia, where England are playing to defend the “ashes” trophy in Cricket’s biggest rivalry, 3 mobile is putting a low fixed price to the test by allowing subscribers access to an entire day’s play for $4.95 or for the whole tournament for $24.95. The company expects to deliver three million live streams.

The TNS survey involved 16,000 consumers in 26 countries. It found that although 20% of mobile users worldwide have 3G phones, less than half of those users are actually using 3G capabilities. Currently only 43% of those people who have mobile TV capabilities actually use that service.

At almost the same time Sony and Ericsson were speaking in Stockholm, executives from various mobile UK TV enterprises were warning at a London conference that the industry needed more time to get its programming and pricing acts together. Nicholas Wheeler, managing director of ITV ON, a mobile news service, said the industry needed to make the customer experience better. More emphasis has to be put on programming, moving away from “girls, gaming, and gambling”, he said.

Claire Tavernier, senior vice president of interactive at Freemantle Media, explained that content had to be “fun and entertaining, that people will watch again and again in only a minute.”  And Deborah Tonroe of Orange, said, “content that has been editorialized is the key.” She admitted the mobile industry had more work to do on making its pricing more transparent.

“When you go into a department store and buy something, they don’t charge you twice on the way out,” she said.

What all of this means is that even if the Ericsson prediction comes true and that 30% of the phones being used by 2008 are capable of accessing mobile TV there is no guarantee that those phones will be used for that purpose. The TNS survey showed that nearly 40% of the global respondents said they had little need or interest in mobile TV with one-fifth mentioning cost as a prohibitive feature. Others are worried about low battery life, screen size, image quality and the like and also there is a concern that unwanted programming would be pushed onto subscribers’ mobile phones.

But once all of that is sorted out there are still government licensing issues for users. In those countries where households have to pay for a TV license, will one need a license for mobile TV? Depends.

In the UK, for instance, if the owner’s household has a TV license then a mobile TV phone can be used there, and even plugged into the electricity mains to save the battery. Anywhere outdoors running the phone off a battery is ok, too. But if the user visits a household that doesn’t have a TV license and plugs the phone into the electrical mains then that’s a violation. But if, in that household, the mobile TV is run from its battery then that’s ok. In other words, it’s not the phone, nor the user, but rather where the phone is used and how it is powered. 

Simple!

ftm Follow Up & Comments