Swisscom closure is another nail in the coffin for DVB-H

Posted by Guillermo Escofet Friday, March 26th, 2010

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Swisscom Mobile’s decision to pull the plug on its DVB-H broadcast-mobile-TV service is the latest in a series of setbacks for DVB-H in Europe, of which the most prominent are its aborted launch in Germany in 2008 and its failure to get off the ground in France last year.

All the evidence indicates that European mobile operators are losing interest in broadcast mobile TV and refocusing on cellular networks as a TV bearer – either via streaming or revamped cellular broadcasting standard IMB. And it seems that many of the operators that have rolled out DVB-H already are regretting it.

Several factors have contributed to DVB-H’s problems:
• There is no proven business model, and no certainty even about whether there is enough demand among users for the service.
• There is a poor choice of compatible handsets.
• Deploying a separate mobile TV network is expensive, and members of the value chain disagree on how costs should be divided.
• Mobile operators and broadcasters disagree on who should “own” the service.

Misguided licensing
In Swisscom’s case, there was the added problem of how DVB-H licensing was handled in Switzerland. Rather than ensuring that the licensee would share the DVB-H network with all other parties interested in offering the service, thus encouraging competition and broadening the service’s reach, the Swiss regulator chose to hand control to the incumbent operator.

Swisscom is secure in its position as the country’s biggest mobile operator and did not feel that compelled to market the DVB-H service as a unique selling point. And the fact that it was the only DVB-H-service provider in the country meant that it had little incentive to reduce prices – which were described by some market sources as “outrageously high.”

Furthermore, other players that approached Swisscom to rent capacity on its DVB-H network found the incumbent’s terms prohibitive. Rival carrier Orange Switzerland, which was one of those players, told Informa Telecoms & Media that the terms were complicated, pricey and ultimately not worth it.

In other words, Swisscom behaved like a typical incumbent.

DVB-H’s greatest European success story – if you can call it that – is Italy, which was the first country in the world to commercially roll out the technology and which has two DVB-H networks in operation, one owned by carrier 3 Italy and the other by wholesaler Mediaset, which leases capacity to the country’s two other carriers, TIM and Vodafone. But it is by no means certain that these services are profitable.

One wonders how many more DVB-H services are destined to go belly-up. Any more closures in Europe would surely sound the death knell for the technology’s prospects of expansion in the region. It would also make operators in other parts of the world reconsider any plans they might have to deploy the technology. DVB-H has made good inroads in Africa and the Middle East, but its long-term position in these markets is by no means secure.