DALLAS-I can see Homer Simpson peering out of the phone in Martyn Gregory’s hand.
The animated “Simpsons” TV star is trying desperately to jump off a burning oil tower and into a hovering helicopter. I see Homer’s wife Marge waving him on. But I’ve already seen that episode. So Gregory changes the channel, and after a few seconds’ delay, we’re watching CNBC. Market numbers scrolling across the bottom of the screen show us that the Nasdaq is up.
Gregory hands me the phone so I can get a better look at, well, the TV.
Gregory is vice president of service delivery for tower company Crown Castle. He’s charged with building a nationwide network that will deliver live TV to mobile phones. Such services are generally the stuff of tiny startups and ambitious PowerPoint presentations-but there it is, sitting in my hand.
Crown Castle is one of a number of players across the world betting on the convergence of wireless and TV. The mobile TV market is unproven, the technology is in its infancy, and no one is quite sure how things will play out. But one thing is clear-it’s coming. And it will likely come sooner rather than later.
Already, Sprint streams live TV content over its CDMA 1xRTT network, averaging between five and 15 frames per second. Verizon Wireless recently launched Vcast over its CDMA EV-DO network, offering downloadable TV clips running at even faster frame rates. But Crown Castle and other mobile TV players are taking the idea one step further-instead of offering reformatted TV content over an existing wireless network, they want to broadcast TV over a network dedicated to portable devices like mobile phones.
TU Media launched just such a service earlier this month in South Korea, according to reports. The carrier, a unit of wireless operator SK Telecom, offers seven video channels and 20 audio channels using the DMB transmission standard. Crown Castle is planning a similar offering in the United States using the DVB-H standard, while Qualcomm Inc. is designing its own service based on its MediaFLO technology.
Gregory was on hand at Texas Instruments’ analyst day here to show off Crown Castle’s DVB-H mobile TV service. TI offers a chip capable of displaying DVB-H broadcasts. For his demonstration, Gregory had several Nokia Corp. 7710 handsets, as well as a satellite dish and a DVB-H transmitter.
Before arriving on the phone in my hand, Homer was first pumped into Crown Castle’s headquarters near Pittsburgh, then sent to a satellite to be broadcast across the entire country. Gregory’s satellite dish-installed on the roof of the Renaissance Dallas-Richardson hotel-picked up the signal and sent it through the DVB-H base station on the hotel’s ground floor. The base station then broadcast the signal to any DVB-H device within a 3- to 5-mile radius. Gregory’s Nokia 7710 devices featured a DVB-H receiver installed inside the battery case.
“The Simpsons” played smoothly on the 7710. The audio portion was synched to the video, and there were no breaks or stalls in the broadcast. The overall performance was vastly better than Sprint’s sluggish TV offerings and slightly clearer than Verizon’s Vcast service. The quality was such that most of the numbers scrolling across the CNBC screen were readily readable.
As CNBC’s commentators discussed the events of the day, Gregory discussed Crown Castle’s plans for the future.
The company plans to launch a commercial mobile TV trial by July. The trial will be held in Pittsburgh and will include several hundred participants. The company hopes to have DVB-H devices on hand from Nokia and at least one other as-yet-unnamed handset manufacturer. Gregory said the company plans to offer eight different video channels and 10 audio channels.
If the trial goes well, Gregory said Crown Castle would be ready to launch commercial service in several large cities by early next year. He said the company could cover between 20 and 30 markets by the end of 2007, offering up to 16 channels of video and 30 channels of audio. Each market would likely require between 30 and 50 DVB-H transmitters.
Gregory said the service would probably cost between $10 and $20 per month and-like the cable TV industry-could include multiple pricing tiers.
Although the service is technically possible-Homer told me so-the real question is who will support it. Crown Castle plans to sell its TV network to wireless carriers or mobile virtual network operators, which would then sell the services to end users. Crown Castle has not yet announced any such carrier deals, although, when pressed, Gregory said the company’s first customer would likely be “a large wireless carrier.” Gregory also said the service would require a ready supply of DVB-H handsets, although those too ultimately hinge on carrier interest.
On the other side of the equation, Crown Castle also needs suitable TV content to sell the service. Gregory said the company is in discussions to add various TV channels like CNBC-and is arranging revenue-sharing agreements-but declined to disclose specifics.
Interestingly, Gregory said Crown Castle managed to sign up CNN as a video channel but can’t yet offer it. He said officials from CNN owner Time Warner want to first modify the broadcast to fit the confines of mobile-phone screens. For example, CNN may discard scrolling updates on the bottom of the screen if they are too small to read on a phone. NBC recently launched its NBC Mobile offering to address such concerns.
Aside from video, Crown Castle is also working to add audio content. Gregory said the company could offer music and news services that would compete with offerings from satellite radio providers XM and Sirius, but could also team with those same satellite radio vendors. Thus, a mobile TV handset could also offer a selection of XM- or Sirius-branded audio content.
“Ultimately, I think there will be synergy rather than competition with the satellite guys,” Gregory said.
Crown Castle is also considering devices beyond mobile phones. Gregory said the company could sell TV receivers for portable devices like Nintendo’s GameBoy or Sony Corp.’s PSP. The receiver could plug into a SD card slot, and Crown Castle could score revenues though monthly fees paid over the Internet.
“We could also offer it as a standalone service,” Gregory said.
Analyst views on the potential for mobile TV run the gamut. IDC’s Lewis Ward predicts mobile TV revenues will hit the $3 billion mark by 2009, adding “commercial video and television may well emerge as the single largest cell-phone-oriented ARPU driver among consumers outside of voice.”
Others differ.
“Consumer demand for paid-for mobile TV remains highly uncertain,” said Phil Taylor, director of Strategy Analytics’ global wireless practice. “We remain unconvinced that consumer appetite for mobile TV services exists outside of niche segments.”
