A Moment Of Olympic Truce: China's Telecom Operators and Media Broadcasters

As China’s mobile TV breaks through into the next major application area, CCID Consulting sees the major providers falling into two camps: China’s major telecom operators that offer TV through streaming media; and media broadcast companies that offer TV through emerging DMB (Digital Multimedia Broadcasting) and CMMB/DAB (China Multimedia Mobile Broadcasting/ Digital Audio Broadcasting) standards.

Currently, China's mobile TV services are based primarily on the mobile phone network. Whether through services by China Mobile or China Unicom, TV and radio content is delivered through mobile phones via streaming media. Both have actively launched mobile TV in most of China’s provinces and municipalities. Services are offered through monthly fees with TV-specific mobile phones, and fees have been coming down. China’s mobile TV subscribers currently number over 5 million.

Streaming Media Mobile TV Subscribers	2005	2006	2007	2007 Share (%)
GSM (thousands)	290	1,850	4,781	93.3%
CDMA (thousands)	82	180	342	6.7%
Total	372	2,030	5,123	100.0%

However, lack of standards is still a challenge and presents market uncertainty. Mobile TV device vendors have launched less than a handful of product with high pricing, and sales of new mobile TV devices number only in the tens of thousands in 2007.

While the convergence of telecom, computer network, and cable TV networks will come to fruition, there is currently a standards fight between telecom operators and media broadcasters. Media broadcasters support CMMB, which enables broadcasters to bypass telecom operators to broadcast signals directly to the subscribers. Telecom operators support T-MMB (Terrestrial-Mobile Multimedia Broadcasting), which is based on streaming media and can better leverage China’s vast existing mobile subscriber base.

In support of the Beijing 2008 Olympic Games and its viewing by consumers, China Mobile offered 40 thousand CMMB (media broadcast supported) mobile TVs. This was a model of cooperation between telecom operators and media broadcasters, but question is whether this will continue.

From China’s mobile TV industry development perspective, CCID Consulting believes such a cooperative model, and value chain, is the most sensible one. Telecom operators provide strengths in communications technology, networks, and enormous subscriber base, while media broadcasters provide complementary strengths in rich content and broadcast infrastructure. These are also lessons learned from China’s IPTV experience.

Moreover, profit models must be discussed and agreed upon, as media broadcasters will need the assistance of telecom operators to achieve sufficient profitability, or at the least shared risk.

The risks of not cooperating are even greater. A non-existent or conflicted value chain only serves to hinder mobile TV development at a crucial time, to waste resources of all parties involved (including hardware vendors), and ultimately, to keep all parties from realizing the enormous potential of China’s mobile phone subscriber base.

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Unless otherwise specified, all information provided is sourced from CCID Consulting.