The Mobile TV survey says ... wireline wins big

Erik Keith, Current AnalysisSeveral years ago, while in Europe on business, I was informed by a Tier 1 networking equipment vendor--which also just happened to be one of the top contenders in the global handset market--that they had conducted an end user survey on the evolving Mobile TV market.  One of the key conclusions of this survey was that the majority of users that had started watching/consuming broadcast TV content on a mobile device--i.e., Mobile TV--while not at home (for example, on the train ride home from work) would continue to watch/view the selected program on their handsets even after arriving home, rather than switching to their televisions to view the same program in a much larger, traditional format. My immediate thoughts about this claim can be summed up as extreme skepticism, to put it mildly. My filtered/verbal reply was somewhat more professional.

"Really?  Interesting. I'd like to see that survey."  I am still waiting for it.

After several years of reflection, and several years of Mobile TV market evolution, I still don't buy it. Yes, the Mobile TV market (in all of its guises and permutations) is already a relevant and potentially lucrative sector. Yet, the assertion that end users--when given the choice between watching TV content on a mobile device or a much larger-scale television--will choose the mobile device, remains ludicrous to me.

I concede that Mobile TV, in our increasingly converged world, is a fantastic supplement to existing broadcast television services. For end users that do not have access to broadcast TV services, Mobile TV is, without doubt, a very welcomed option. Consider the business traveler killing time in the airport by watching a live sporting event, for example, a soccer game or tennis final (as opposed to unicast sports highlights).. There have been numerous occasions where I would have loved to have this option, and paid a high premium to do so (although not to the tune of the £31,000 a Vodafone customer was billed for several years ago).

At this point, it is safe to say that Mobile TV vs. Broadcast TV boils down to several key points:

  • 1) Screen Size and Resolution: Watching virtually any TV/video program on an average standard-definition TV set is a far better viewing experience than any mobile device can provide (I would argue, magnitudes better). Not to mention 40" (and larger) HDTVs are fairly common in consumer households these days, and the array of HD programming available is now massive and ever-expanding, regardless of whether it delivered via cable, satellite, telco or over-the-air (OTA).
  • 2) Wireless Networks, Even with LTE, are Still Not Broadcast TV-Optimized: With the proliferation of iPhones and other 3G and 4G handsets (not to mention PCs/laptops with mobile broadband modems), the networks of AT&T, Verizon and Sprint , and multiple European and Asian operators will be increasingly overloaded, even when LTE networks are fully operational in major metro areas. Even with 100+ Mbps of downstream data per cell, the degree of difficulty in delivering Mobile TV/video services to high-user-density cells will be compounded for operators as subscriber counts increase, and further compounded with unicast video traffic growth. (The exception to this is DVB-H networks, which are optimized for broadcast Mobile TV, but are dying off).
  • 3) Wireless Data Caps Will (Justifiably) Restrict TV/Video Viewing: While the average Comcast, DirecTV or FiOS/U-verse customer's monthly TV service rates are fairly consistent, in the Mobile TV world, content = data (and lots of it). Handset consumers will, inevitably, find their monthly data allowances to be insufficient for more than a handful (sorry) of TV/video streams per week. Coinciding with the iPhone 4.0 launch was AT&T's elimination of its unlimited data plan, providing clear evidence that even with ever-escalating network bandwidth, bandwidth is not free, and wireless operators will continue to charge by the minute and bit, in contrast to most (but not all) wireline operators. This is simply a reflection of the costs associated with mobile data service delivery vs. wireline service delivery.

So, where does this leave us, as consumers and/or early technology adopters?  Again, Mobile TV has promise, especially in terms of generating incremental "eyeballs" for any given piece of content. In fact one can assert that Mobile TV complements existing video services, and thereby helps operators reduce churn and extend their brand via an additional service. And of course, where there are eyeballs (more formally, unique viewers), there is potential for revenue generation via both generic and targeted advertising. Ultimately, however, I think Mobile TV will remain a highly supplementary, complementary service for consumers. The simple fact is that licensed-spectrum wireless services, even with bandwidth steadily ratcheting upwards, will always be a step or two behind the concurrent bandwidth/services able to be delivered by established TV broadcast technology.

While LTE promises, for example, up to 100 Mbps per cell, cable HFC and telco fiber (and even copper) are already able to offer ultra-high bandwidth services that provide dedicated per-user speeds of 25-100 Mbps, and in some cases, well over 100 Mbps (an extreme example is Hong Kong Broadband Network's 1 Gbps residential service, which leverages Alcatel-Lucent's GPON solutions). Even with the so-called limitations of cable HFC plant, some cable operators are also offering >100 Mbps services, thanks to DOCSIS 3.0 channel bonding and related bandwidth enhancement and optimization technologies such as node splits, spectrum enhancement (up to 1 GHz), switched digital video (SDV) and eventually, broad-scale utilization of MPEG-4 compression.

Six months ago, at the FTTH Council Europe event in Lisbon, Portugal, Susan White, Director of Wireline Product Marketing for Alcatel-Lucent, concluded a presentation on mass-market FTTx services by stating (my paraphrasing) "...when wireless services get to 100 Mbps per user, wireline services will be at 1 Gbps."   The 10x multiplier/differential is certainly a fair assertion, for both current and future wireless/wireline bandwidth comparisons. However, for me, and I suspect for many consumers, even the very best Mobile TV experience will always pale in comparison to that provided by dedicated broadcast TV; it is simply a function of the superior, immersive nature of a larger-scale visual (and audio) format over an iPhone, iPad or even a mobile PC.  

Erik Keith, Principal Analyst, Fixed Access Infrastructure, Current Analysis is a monthly columnist for FierceTelecom.