TECHNOLOGY & CONVERGENCE

Africa: Mobile TV Figure 'Will Spiral 800 Percent in Three Years'

The number of people watching television on their cellphones is poised for an eightfold increase over the next three years, reaching a figure that will finally quash doubts about its viability.

If estimates from research house Gartner prove correct, today's 60-million mobile TV viewers will top 488-million in 2010. It will become a mainstream service in most developed markets, with Japan enjoying the largest audience, followed by western Europe. Its popularity will vary widely from country to country and will be split between services delivered over the cellular networks and those using broadcasting technologies, Gartner says.

The largest growth will be over the cellular networks, with today's 38-million users rising to 356-million in 2010, while the broadcasting method will reach 132-million people, up from 21,8-million now.

Huge growth will not necessarily translate into huge profits. That will happen only if operators can attract enough subscribers to pique the interest of advertisers.

Attracting and maintaining a healthy base of viewers will be far from straightforward, analysts warn. Consumers are currently ambivalent about watching television on the move. Although the uptake will grow considerably, most users will receive mobile TV as part of their cellphone subscription. "Uptake will not be driven by consumer demand so much as by operators including TV in bundles as a default service so that it appears free," says research director Carolina Milanesi.

She estimates that only 30% of mobile TV subscribers will ask for the service, while 70% will receive it in a bundle. Because the service will be part of an overall package, the short-term revenue potential will be depressed. In the long run, Gartner believes, it could make a major contribution to overall consumer spending. The total revenue could reach $25,8bn by 2010, up from just $300m today.

Gartner is advising operators to consider revenue models carefully. Instead of competing on tariffs, they should focus on creating a unique "mobile TV experience" to attract subscribers. As cellular tariffs are destined to decrease, winning advertising revenue in the future will be crucial, Milanesi says.

The mobile operators need to guarantee quality, variety and exclusivity to justify charging a premium for TV services or to justify charging for it at all. They should not count on advertising to subsidise TV services much in the next five years. They should expect that the subscriber base will be limited, yet, as numbers increase, advertisers will come on board. Operators should also aim to make mobile TV a unique experience by supplying content that is mobile-specific or generated by user communities such as YouTube, the analysts believe.

Business Day Johannesburg, April 19, 2007

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