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Analyst Dismisses Business Model of Mobile Broadcast TV

Oct 12, 2007  •  Post A Comment

Mobile TV as delivered by dedicated networks does not appear to be a viable business, a prominent analyst has told Red Herring.
“It’s difficult to make a business case for mobile broadcast TV that can generate anything like the revenue you can get from cellular services,” said Tim Farrar, president of Telecom Media and Finance Associates told Red Herring.
The most lucid argument to date making this case is AT&T’s purchase of spectrum in the 700MHz band from Aloha Partners, the analyst told Red Herring.
Around the world, mobile broadcast TV on dedicated networks has only 12 million subscribers, Mr. Farrar said.
–Chuck Ross
The following story, from Crain’s RCR Wireless News, gives more details about the AT&T/Aloha deal.
By Colin Gibbs, RCR Wireless News
AT&T Mobility said it will pay $2.5 billion in cash for all of Aloha Partners’ 700 MHz spectrum, apparently signaling Aloha’s exit from the mobile broadcast space.
AT&T, which said it remains committed to using Qualcomm’s MediaFLO network for multimedia wireless broadcasts, said the deal gives it 12 megahertz of spectrum covering 196 million people in 281 markets. AT&T Mobility said the deal is expected to close in the next six to nine months.
Representatives from Aloha Partners were not available to comment on the deal.
Aloha Partners is currently testing its HiWire DVB-H network in Las Vegas with partner T-Mobile USA. HiWire was the remaining DVB-H player in the U.S. market following Crown Castle International Corp.’s decision in July to spin off its Modeo business and exit the mobile TV business.
HiWire faced stiff competition in the mobile TV space, however; Qualcomm’s MediaFLO business has signed mobile TV deals with Verizon Wireless and AT&T Mobility.
AT&T Mobility, meanwhile, said it has yet to decide how it will use the 700 MHz spectrum. Spokesman Michael Coe said the operator still plans to deploy mobile video services with MediaFLO, and may offer multimedia services to other carriers—just as Aloha had planned to do.
“We’ll use the spectrum either for broadcast mobile video or two-way voice and data services, but not both,” said Coe. “We’ll make that determination based on what’s best for our customers.”
AT&T has been on a buying spree in recent months; earlier this year the carrier announced an agreement to acquire Dobson Communications Corp. for $2.8 billion.
The news comes as AT&T and the rest of the wireless industry gear up for the 700MHz spectrum auction, set to begin early next year. Up for grabs are around 1,000 licenses in the valuable 700 MHz band.

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