Mobile TV stalls in Sweden

Stockholm, Sweden — In a country where cell phone market penetration exceeds 110 percent and 3G networks already cover 98 percent of the geography, you'd think delivery of TV to consumer handsets would be a pushover.

However, such an assumption fails to take into account both the logistics and the politics of mobile TV in Sweden, where broadcasters are pitted against mobile operators, the technology landscape is a battle of the titans (Ericsson vs. Nokia) and regulators face huge pressure to revise — or not to revise — their plans for the digital TV spectrum.

In short, it's a mess.

Sweden thus far has made no regulatory decisions on spectrum allocations for mobile-TV broadcast. There is no consensus on standards, and no viable business models have been worked out.

Sweden's dilemma stands in sharp contrast to several countries where leading network operators — or the government — have already settled on their technology choices for mobile-TV broadcast, with some service providers taking active roles in the testing of both technology and business models.

South Korea, for example, last week launched the world's first commercial mobile-TV, -radio and -multimedia services based on the Digital Multimedia Broadcasting standard, which is part of the Digital Audio Broadcast platform.

Finland, whose government has settled on Digital Video Broadcast-Handheld (DVB-H) for mobile-TV broadcasting on its UHF spectrum, last week closed the initial deadline for applicants offering mobile-TV service. Four candidates have emerged.

Meanwhile, Crown Castle International Corp., which acquired exclusive terrestrial rights to 5 MHz of L-band spectrum in the United States, has completed DVB-H network technology testing and is poised for consumer trials (see Nov. 28, page 18).

But, in fairness, Sweden's tardiness is not unique. Most countries worldwide are still scrambling to make an intelligent choice on mobile-TV service technology. "Two separate industries — broadcasters and mobile operators — are colliding in Sweden," said Niklas Engström, who oversees media and entertainment at XLENT Strategy, a high-tech Nordic management consultancy headquartered in Stockholm.

Mobile operators in Sweden — so advanced in third-generation cellular networking — aren't sure if, or how soon, they will need to switch the current mobile-TV "unicast" architecture to a broadcast model. In the unicast mode, each user makes a request to the media server to see video. In a multicast mode, many users link to a single broadcast signal and join the broadcast time line when they connect.

A parallel dilemma is the choice between DVB-H, over a separate mobile-TV broadcast network, or Mobile Broadcast/Multicast Service (MBMS) over the 3G network. To muddy the operators' choices further, neither DVB-H nor MBMS exists today as a commercial product.

The Swedish government has complicated things by declining to say whether it will open up or share the terrestrial digital TV spectrum with mobile-network operators. The government-owned broadcast network provider, Teracom — an infrastructure supplier to Swedish TV broadcasters — currently has monopoly access to both analog and digital TV spectrum here.

With no mobile-TV broadcast plan in place, all four mobile-service providers — TeliaSonera Sweden, Tele 2, Vodafone Sweden and 3 Scandinavia — have started delivering TV to handsets in unicast, over the existing network. The danger in this scheme is that during periods of exceptionally heavy traffic, unicast could bring down the network. That's because unicast needs to establish a direct connection with each user every time one requests real-time TV streaming or TV clips.

Swedish operators remain mindful of this worst-case scenario, but prefer to concentrate on gaining the first-mover advantage in mobile TV. To do that, they need to stick with unicast now.

TeliaSonera Sweden, for example, has launched six TV channels since last summer, free of charge. CEO Marie Ehrling called the free mobile-TV offering "a campaign" with a purpose. "We are trying to find out the right pricing model," she said.

Lack of traffic
Another reason operators in Sweden aren't moving faster on mobile TV is that they haven't seen enough traffic for video services on their existing networks. "We don't have such a clear plan for mobile TV, as we haven't exhausted video-on-demand services to the level of saturating our network," said Shlomo Liran, CEO at 3 Scandinavia.

Mikael Baeck, vice president of wideband-CDMA radio networks at Ericsson, also pointed out that there is ample unused space in the 3G network. "It won't get overloaded any time soon," he said.

And then, there is persistent skepticism over whether mobile TV is indeed the killer app that Nokia insists it is.

"I identify mobile TV as poor TV," said 3 Scandinavia's Liran. "History tells us that customers' [relative] need for music and for TV are completely different in scale. Look at the huge portable music player market Sony's Walkman created. Compare that with the small market for Casio's portable TV."

Judging from the way the market is shaping up in Sweden, some industry observers are beginning to wonder if DVB-H-based mobile TV may have a much smaller window of opportunity for a network and handset launch here than once thought.

By streaming TV or offering video clips via 3G, "Mobile operators in Sweden are already taking ownership of 'mobile TV,' " said XLENT's Engström. "That is a threat to Teracom, a Swedish broadcast TV network operator." Engström criticized Teracom for being too slow, and possibly too late, to act on its mobile-TV broadcast planning.

After years of discussions on possible trials, Teracom is finally scheduled to launch a mobile-TV broadcast test in the first quarter of 2006. The trial, based on DVB-H, will take place in the greater Stockholm area, said Ingela Lindahl, Teracom's business development manager responsible for the test.

Rather than a so-called "friendly trial," which often involves employees' families and friends as potential users, Teracom's test will involve 500 people picked from "broad-based" samples, Lindahl said. Teracom will offer 16 channels, with content "mostly taken from existing TV broadcast." Nokia and another unnamed handset vendor will supply DVB-H-enabled mobile phones for the trial. Meanwhile Lindahl is keeping mum on any possible partners — a list that might include TV broadcasters, mobile-phone operators or Teracom's own pay-TV service company, Boxer.

Teracom hasn't said whether it intends to share its terrestrial digital TV spectrum with mobile operators, or whether the primary goal is to snag the lion's share of the emerging mobile-TV broadcast market for Boxer. Whatever the strategy, one thing is clear: Teracom is unlikely to launch a mobile-TV network by itself.

"Teracom will need a mobile operator as its partner," said Engström. The operator would be able to offer a two-way service, which is essential to the payment and encryption infrastructure, he explained.

Spectrum questions
Liran of 3 Scandinavia believes Teracom needs to open its government-owned digital TV spectrum, "giving all of us [mobile operators] equal treatment." Asked if discussions are under way between broadcasters and telecom operators in Sweden, Liran said, "It's a work in progress."

It's clear that mobile operators in Sweden are not the ones shying away from mobile-TV broadcasting. Liran, for one, said, "DVB-H seems like the winner." And Pekka Pesari, development manager of TeliaSonera Finland, noted that his company has signaled the Finnish government that it intends to become a DVB-H-based mobile-TV broadcaster.

TeliaSonera Sweden CEO Ehrling said that her company remains neutral on mobile-TV standards. She added, however, that the standard chosen by any TeliaSonera operator — such as TeliaSonera Finland — will become the de facto choice for TeliaSonera operators in all the Nordic countries. "It will be more efficient and faster to the market [that way]," she said.

But even if mobile operators do move to the broadcasting model for mobile TV, the issue still remains of whether to go with DVB-H, a separate broadcast network, or with MBMS over the 3G network. And then there's the "marketing war" between Nokia and Ericsson, as Ericsson's Baeck acknowledged.

For Ericsson, which is in the business of selling network equipment to operators, "We want operators to have a convenient track — sticking to the 3G network and building MBMS on top of it — rather than adding a totally new broadcast network like DVB-H," Baeck said. Nokia's focus, on the other hand, is pushing volumes of new handsets, and DVB H-enabled phones represent a whole new growth market.

Pesari of TeliaSonera Finland believes that such a choice is highly dependent on a use-case scenario. Ordinary 3G, perfect for unicast services, can support video-on-demand (VOD). "But we don't know what the mix is going to be — how much TV users want to watch live and how much on VOD," he said. For streaming live TV picked from a package of 20 to 40 TV channels, he said, "MBMS is not the right technology," because of its service-provisioning limitations.

One factor that could sway operators one way or the other is the availability of handsets. Pesari, for example, is concerned that no handsets supporting MBMS are available today. Liran of 3 Scandinavia agreed. "It all depends on handset availability. Nokia seems to be moving much faster [in this regard]," he said.

Meanwhile, Ericsson's Baeck predicted that the transition to MBMS-enabled 3G networks will start in 2007.