TV for mobile phones almost ready for prime time

By Lucas van Grinsven and Astrid Wendlandt, Reuters

AMSTERDAM/PARIS — Mobile phone makers expect that many consumers will soon watch television on their mobile phones, and they are confident plenty of programs will be available to cater to the handheld screens.

The citizens of Cannes, on the French Cote d`Azur, may have been under the impression last week that television on a mobile phone is already a reality, because the city was covered in posters from handset vendors advertising the service on new models during the 3GSM mobile communications trade show.

While TV on mobiles is being tried out in nations across the world, it is not yet available to the wider public. But the communications industry has rarely been more united in its embrace of a new technology and the anticipation of success.

``I think TV and video will drive demand more than camera phones in places like Korea, Japan, Europe and the Americas,``

Alex Mandl, chief executive of French smartcards for mobile phones maker Gemplus, told Reuters at 3GSM.

Tapping the well-entrenched TV viewing habits of the public, market research group Gartner expects that real-time TV to mobile phones will be commercially available across Europe in 2007. The technology itself may be ready sooner.

``Imaging was last year; music is this year; video is next year,`` said Hugh Brogan, chief executive of British handset maker Sendo.

Wireless telecoms operators such as Orange and Vodafone are already dabbling with video services over their fast third-generation (3G) networks, offering video clips and live TV from selected channels such as CNN.

New phones

Orange France said the first 35,000 subscribers of its 3G network watched an average of 25 minutes of live television on their phones in the first two months of operations. Hutchison Whampoa`s 3G network ``3`` in Britain delivered 10 million video music downloads to its subscribers in six months.

But these often patchy video clips should not be confused with clear television images on a mobile phone. Digital TV will come on a separate broadcast network of around 60 different channels.

Consumers will be able to tune into these broadcast networks for as many hours as they want without clogging up the network. It will free up the phone network for those data services such as video telephone that have to be delivered on demand and in real time and for which operators hope to command higher prices.

The new phones will have to deal with both broadcast TV and cell phone communications signals. Nokia said it would launch a model by next year that will be able to receive the European digital broadcast standard for mobile phones, called digital video broadcast for handheld (DVB-H).

``We expect a device with DVB-H in the first half of next year,`` the chief executive of Nokia`s Multimedia unit, Anssi Vanjoki, told Reuters in an interview at 3GSM. He added he expected volume sales as early as in the second half of 2006. Chip makers such as Philips and Qualcomm are scrambling to get energy-efficient DVB-H chips out before the end of the year.

South Korean phone makers Samsung Electronics and Siemens in Cannes unveiled models with displays that mimic the dimensions of a normal TV screen.

Some analysts warned the technology is not ready yet.

``The European operators appear to be unclear at this time about how the (mobile TV) service will be priced, and there are still issues with battery life and screen size,`` Merrill Lynch said in a note about the 3GSM fair in Cannes.

Others, such as CEO Cedric Ponsot of Vivendi Universal`s Mobile International said the mobile industry, as ever, was fixated on the next big thing rather than developing applications and revenues for networks available today.

Different TV signals

Nokia, however, is trialling DVB-H with wireless tower operator Crown Castle in the United States and Bridgeway Networks in Australia. Many other trials are also taking place.

Crown`s network will rival Qualcomm`s U.S. network, called MediaFlo, which will not work with DVB-H. Qualcomm claims its own TV network is better suited for mobile devices, requiring less energy and allowing quick channel switches.

``It was designed from the ground up as a mobile system,`` Chief Operating Officer Tony Thornley told Reuters. Qualcomm decided to build its own network, which starts operation some time in 2006, because it felt mobile TV ``was going to happen a lot faster if we did it``, Thornley said. Nokia did not think it would have to make an investment like Qualcomm`s. ``TV broadcasters and telecoms companies seem willing to build it,`` Vanjoki said.

One London-based analyst at a major bank who just returned from Cannes said he ``got the impression that handset makers were more bullish about TV than the operators``.

Still, trials in Germany by Nokia and Vodafone showed 80% of consumers want TV services on their mobiles and are willing to pay 12 euros ($15.67) a month extra for it.

A.T. Kearney consultant Andrew Cole expects they may pay as much as $20 per month.