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* 3G enables operators to exploit the power of TV content to sell into the consumer mass market

* Strong latent demand for TV and video content over mobile is demonstrated by consumer research and rapid take-up of early 3G services

* Operators must work around limitations of 3G networks to deliver profitable, but affordable, services

* 3G networks give mobile operators first-mover advantages over emerging broadcast solutions, such as DVB-H (Digital Video Broadcasting ­ Handhelds)

* Integration of 3G enhancements and broadcasting technologies will be required to move from short clips to real-time streaming of TV and video


CAMBRIDGE, UK, 8 October 2004 ­ TV and video services could be the applications that European mobile operators have been looking for to increase the revenue they get from mass-market consumers over their 3G mobile phone networks, according to a new report, TV and Video Services on a Mobile Phone: the killer application for 3G? from Analysys, the global advisers on telecoms, IT and media (

“TVs are found in almost every household and consumers spend far more time watching TV than they currently do using their mobile phone,” says Alastair Brydon, report co-author. “However, the results of consumer studies and the rapid take-up of 3G TV and video services in some countries suggest strong latent demand for consuming this type of content over mobile networks. By focusing strongly on mobile TV and video on demand, South Korean operators have already managed to achieve nearly three times the 3G penetration of Japanese operators, despite the later launch of their services.”

By supporting video streaming and video downloads, 3G finally enables mobile operators to exploit the power of television among the mass market of consumers. The report sets out a compelling case for mobile TV and video and suggests that such services have the potential to be as valuable to mobile operators as messaging is today.

“As mobile operators consider how to encourage the take-up of new 3G handsets and to generate additional revenue beyond that from voice and messaging services, they should look to exploit the power of television in the mass market,” says Alastair Brydon, report co-author. “3G networks give operators a first-mover advantage over emerging mobile broadcasting technologies, such as DVB-H, to address the strong latent demand we believe exists for TV and video services.”

The report, though, does caution that the performance, capacity and costs of 3G technology do place some limitations on how TV and video content can be handled by these networks, especially as this content can consume substantial amounts of data compared to other mobile services. “TV and video can make or break 3G,” says co-author Mark Heath. “The challenge is to offer compelling services that balance affordability for mobile users with profitability for operators.”

The report demonstrates that current pricing of 3G for video services can badly miss the mark in terms of affordability or profitability. “A two-hour movie, transmitted at 384kbit/s, would consume over 300Mbyte of data and operators would have to charge over USD300 if they wanted to achieve similar margins to voice telephony,” warns Heath. “Making long programmes affordable would devastate their revenue per Mbyte and create network congestion.” The report shows how, with short video clips, operators can strike a balance between giving the customers what they want, at a price they can afford, and generating an acceptable revenue per Mbyte for the network operator.

Developments in video coding and the deployment of 3G enhancements such as HSDPA (High Speed Downlink Packet Access) from the end of 2005 will, in principle, relieve some of the limitations of W-CDMA technology, reducing by a quarter the cost of carrying a given quality of video clips and enabling either improved service margins and/or price decreases to stimulate usage. “However,” says Alastair Brydon. “even with significant enhancements such as HSDPA, wide-area 3G technology will not be able to support extensive viewing of TV and video-on-demand services by a large proportion of mass-market users.”

“Ultimately, broadcasting technology is the best solution for one-to-many distribution of video content,” says Brydon. “Integration of 3G with emerging broadcasting technologies, such as DVB-H or satellite, may be the only solution for widespread use of mobile TV services. Already some operators are actively involved in mobile broadcasting trials. ”

According to the report, the business model for mobile TV and video services will be a complex one. It will potentially involve a mixture of delivery networks, owned by different organisations, requiring revenue-sharing arrangements between network operators, broadcasters, content owners and various intermediaries. “It is vital for mobile operators to seize first-mover advantage and take a proactive role in defining the future value chain,” adds Heath.

TV and Video Services on a Mobile Phone: the killer application for 3G examines the substantial potential of mobile TV and video services, and the role of 3G, HSDPA and emerging broadcasting technologies. The report identifies optimum service and pricing strategies for 3G operators, to address strong latent demand for mobile TV and video services. The report evaluates the key broadcasting technology developments that are taking place, and considers the business model for mobile TV and video services.

The report is available to purchase online at, priced at GBP1700. For more information, telephone Analysys on +44 (0) 1223 460600 or email

About Analysys (

Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 130 staff in offices in Cambridge, London, Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, and works with associates in Auckland, Melbourne and Vancouver.

Recent reports include:

* Delivering high-speed mobile Internet/intranet services: the role for 3G and public WLAN (August 2004)
* The Business Case for Broadband Entertainment (July 2004)
* 3G Launch Strategies: critical decisions on services and technology (June 2004)
* Western European Fixed Telecoms Markets: forecasts 2004-2009 (June 2004)
* Spectrum Trading and Liberalisation: new threats and opportunities for telecoms business models (June 2004)
* The Road to Fixed—Mobile Substitution Starts with 3G (April 2004)
* Western European Mobile Forecasts and Analysis 2004­2009 (March 2004)
* VoIP in the US Market: services, business models and regulation (March 2004)
* Strategic Options for Fixed and Mobile Operators in Central and Eastern Europe: scenarios and forecasts (February 2004)
* Vodafone live! versus i-mode ­ lessons and prospects for the rise of global wireless services (February 2004)
* Delivering the Broadband Home. New fixed and mobile services and devices: forecasts 2003-2008 (January 2004)
* Scenarios for the Evolution of the Wireless Industry (December 2003)
* The Future of Personal Videotelephony (November 2003)
* Operator Strategies and Key Performance Indicator Benchmarks (December 2003)
* The Role and Impact of Emerging Wireless Technologies (October 2003)
* Mobile Content and Entertainment Forecasts and Analysis (September 2003)
* Emerging Charging Architectures for New Mobile Services: understanding and evaluating the available technical solutions (August 2003)
* Extending the Broadband Opportunity: new technologies in xDSL (August 2003)
* Mobile Data Solutions for Businesses: maximising take-up and revenue (July 2003)

Media contact (for author photography, executive summaries and interviews)

Louise Nunn
Tel: +44 (0)1223 460600

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