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India still low on mobile TV, but rollout of 3G services perks up market

14-November-2007
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India still low on mobile TV, but rollout of 3G services perks up market

With the Government finally having announced the entry of 3G services in India, Indian telecom marketers are all set to embrace mobile TV as a medium to deliver news and entertainment to customers on the move. The market looks promising for telecom operators, especially CDMA operators like Reliance Communications and Tata Teleservices.

According to the latest announcement made by Telecom Minister A Raja, there was only good news for the end users with the Government giving a chance to all telecom operators, license holders and new international players to bid for the 3G services in India. The policy would help the existing CDMA players as they would be allocated the 800 MHz without participating in the auction, provided they paid an amount proportionate to the highest bidder in the auction for GSM players.

The current mobile user base in India is more than 200 million, and thus, it is apparent that the market for mobile TV is already there. But with the lack of quality networks and other technical requisites, Indian telecom operators prefer to play a watching game until the complete revolution in terms of mobile TV takes place in the country.

Broadcasters are yet to be allowed to legally broadcast on mobile TV and hence, operators have to contend with streaming and buffering of live TV or video clips. Reliance Communications was the first operator in India to introduce this service for high-end mobile users.

Krishna Durbha, Head of Sales and Marketing – Applications and Content Group, Reliance Infocomm, said, “Currently, Reliance Communications has 11 TV channels, including news and entertainment channels. We, at Reliance Communications, believe that there is a lot to happen in mobile TV in India with the rising desire among customers to assimilate content while on the move. Entertainment remains a top priority among Indian consumers, and news will always find significance at the time of breaking news.”

Durbha further said that though most of the companies abroad were offering quality services with 3G, Reliance Communications, with the support of the CDMA network, had been successful in delivering quality live TV and videos on mobile phones.

Explaining the current mechanism of mobile TV via the CDMA Network, Durbha said, “There is a link on the mobile screen, which is connected to the server called the Darvin server, that essentially encodes signals from the satellite, generating live TV on ‘Reliance World’ with a minimal delay or lag of say 5-10 seconds.”

Abdul Khan, President- Marketing, Tata Teleservices, said, “There are 120-odd commercial mobile TV services worldwide, and it is still not a ‘disruption’ to consumers. But with 3G networks now rolling out, it would expand. Device manufacturers have to contend with user interface, screen size, power and memory. In India, what is purported to the mobile TV is a low-end experience and we are waiting and watching.”

Khan further said that the key lay in offering consumers good quality services at the right price with applications that were simple and user-friendly. Commenting on the probable repercussions on the existing services, Khan said, “The current business models would remain as it is, and rather Mobile TV would come as a value addition to other services.”

Internationally, South Korea is leading the business in mobile TV followed by Japan and US, experts believe that India is the next emerging nation with 3G coming into picture.

In terms of revenue generation, experts preferred not to comment considering the early stages of the business. Existing business models are the ‘pay-per-download’ model and the subscription based model.

“Pay-per-download is more popular given the early stages, but over a period of time as the market expands, the subscription-based model should be more appropriate,” explained Durbha. The industry average in terms of pay per download is Rs 15 for five minutes and subscription model that could be rolled out soon would be around Rs 99 per month.

TV advertising on mobile via different channels is yet another opportunity, this time for brand managers to earn through a different this medium. But still the brands are testing the waters as a marketing medium, and till now they have found reasonable effectiveness. “Mobile TV is a subset of mobile and hence, it is important for marketers to understand that mobile as a medium for advertising has to flourish first before they could think of bringing ads from TV channels,” said Durbha.

From the marketing perspective, considering the legal issues, the marketers believe that the permission based marketing approach would be most appropriate for through this new medium.

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