AN INNOVATIVE APPLICATION: MOBILE TELEVISION

”WILL IT BE A SUCCES?"

Chang, Dwain, Erasmus University Rotterdam, The Netherlands,

279457dc@student.eur.nl
Chin, Mandy, Erasmus University Rotterdam, The Netherlands,
280614mc@student.eur.nl

Abstract
This paper discusses a special kind of mobile innovation, namely mobile television. There are
several factors why people think that this innovation will be a success. Prior research shows that
people are interested in mobile television, especially while on the road. But to make mobile
television succeed, providers will have to deal with a few issues like technological constraints
and smart price settings. They also have to be innovative in how they bring mobile television to
the market. Furthermore, mobile telecom companies will have to deal with the fact that people
will use their phone less and less for calling, so they will have to find other ways to bind people.
Some examples are mentioned in this paper like offering 3G broadband or HTML-recoding.
Keywords: Mobile television, M-Commerce, Mobile innovation.

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1 INTRODUCTION
1.1 Background

Mobile commerce is a form of e-commerce that specifically focuses on commerce by the use of
mobile devices. Although still in its infancy, m-commerce is developing rapidly and becoming
extremely popular. M-commerce is a very important topic nowadays. Almost everyone has a
mobile phone. Companies and organisations who supply products or services make use of this
fact by making their business activities easily accessible to the customer. When a product or
service is easily accessible and also at anytime, the consumer will likely make use of that product
or service as opposed to a product or service that is acquired in the traditional way. Mobile
phones that were initially made for calling are now able to provide the user many other services.
To gain a competitive advantage over other companies, a company must be innovative in its
processes and product developments. Innovation is the introduction of something new. Thus,
companies introduce something new go gain a competitive advantage.
This paper will briefly discuss the recent trends and applications in mobile commerce. One of
these trends will get special attention, namely mobile television. Most of the data that is used is
obtained by company visits (in Ireland) at Vodafone, Ammeon and other scientific papers and
publications.

1.2 Research questions

One recent innovation in the mobile world is mobile television. It is interesting to see whether
mobile television will be a success or not, and what mobile television providers must do to make
this succeed.
That is why we formulated the following (main) research question:
• Will mobile television be a success?
While researching this trend, a few other interesting trends and applications will be mentioned to
give a general idea of other ways (telecom) companies can use innovation to gain a competitive
advantage.
All of our results are based on situations in the Irish telecom sector.

1.3 Hypotheses

When we observe the technological developments in m-commerce, we can see that mobile
Internet is becoming faster these days. The difference between the speed of the mobile Internet
and the speed of the Internet connection people have at home is becoming smaller. For this
reason, we are expecting to see telecommunications companies developing mobile applications
that are mainly Internet-based.
Our expectations regarding mobile television is that mobile television in its current form won’t be
a success. Mobile television in its current form is simply downloading clips that are offered by
certain providers. We will discuss this in more detail in one of the chapters still to come.

1.4 Relevance

There are many examples that show the business relevance of innovations in mobile commerce.
Two headings of articles follow below.

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Heading from an Internet news article: “Press Release: Mobile gambling wagers to approach
$12bn within 3 years, according to Juniper Research”1. M-commerce is booming business. The
previous quote suggests that mobile gambling, which is a part of m-commerce, will generate
$12bn dollars within the next 3 years. And that is gambling alone.
Mobile television to reach 120 million users by 20122. This article suggests that mobile television
is expected to reach almost 120 million users by 2012, which is a significant increase from the
current 12 million.
If we think of mobile services such as sending terrorist alerts or medical alert, innovations in m-
commerce also have scientific relevance.

1.5 Methodology

The first step in this project is to conduct a literature study on m-commerce and its applications
with a special focus on mobile television.
After that the research will move to Ireland, where several companies will be visited. The two
most important companies for our research that will be visited are:
• Vodafone: Ireland's leading mobile phone operator with a customer base of over 1.8 million
and a total of 1,500 employees.3
• Ammeon: is a privately held consultancy company headquartered in Dublin and one of
Europe's fastest growing technology companies.4
• The information that is obtained at these two companies and the information gathered during
the literature study will then be analysed and the paper will be written next.

1.6 Outline

This paper is structured as followed: This chapter gave an introduction to mobile commerce and
discussed our research question, the relevance of this topic and the way we worked. Chapter two
is our main chapter. In this chapter we will discuss mobile television. We will take a look at the
pros and cons of this trend being a success. Chapter three will give a brief overview of some other
interesting trends and applications at the moment. Chapter four is our closing chapter with a short
summary of the whole paper.

2 MOBILE TELEVISION
2.1 Mobile television in its current form

Mobile television in its current form is simply downloading clips and playing them on the users’
mobile device. A recent example on how this works is during the last Rider Cup. Video highlights
and news are made available for the customers.

2.2 Mobile television in the desired form

Telecommunication companies would like to offer their customers the ability to experience
mobile television just as “normal” television. Instead of downloading clips or watching streaming
video clips, users can switch from channel to channel.

1
http://www.juniperresearch.com/shop/viewpressrelease.php?pr=57
2
http://www.theregister.co.uk/2007/09/20/mobile_tv_report/
3
http://www.vodafone.ie
4
http://www.ammeon.com

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2.3 User expectations

This section of the paper will discuss the user expectations of mobile television. Questions like
“where and when do people want to use mobile television?” and “what kind of programs do
people want to see on their mobile device?” will be addressed.
According to Dutch research 5 almost half of all the people who have a mobile phone know what
kind of programs they want to see on their mobile device, while only 1% of the users make use of
mobile television.
The most popular places where people will make use of mobile television are while on vacation
or while travelling. The younger users want mobile television in bed or at school.

Figure 1 shows user interests (mobile television)

As mobile telecom companies expected, male users will want to see news and sport related
programs, especially soccer, while women want to see soaps and television series.

2.4 Market expectations

In this section of the paper we will illustrate some facts and figures about the forecasts done by
external parties6.
• This relatively non-existent market is expected to grow exponentially to 69 million people
worldwide by 2009, generating total revenue of around $5.5 billion.
• Mobile TV will represent US$ 5 billion in 2010 world wide, and € 17.5 billion in Europe by
2015.
• By 2010, 125 million people over the world will own a Mobile TV phone, and 65 million will
be subscribed to a Mobile TV offer.
• In Korea, SK Telecom already has 1 million subscribers to its Broadcast Mobile TV bouquet.
The facts mentioned above are all positive. There is also however scepticism regarding mobile
television. Some examples why people have doubts are mentioned below. Mobile television
providers will have to consider the following constraints:

5
http://www.tns-nipo.com/print.asp?id=c001&file=persvannipo\tv_kijken_op_mobiel07.htm
6
http://www.broadcastpapers.com

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• Mobile phone companies will have to pay a fee to offer mobile television content. So the
customers of the company will most likely have to pay for the service if they want to use it. It
isn’t sure that people will want to pay for a mobile telephone subscription while they are
already paying for television at home.
• People don’t want to watch television on a small screen for too long. Mobile television on a
small screen won’t work for long movies or for a whole sports match for example.
• Technological constraints. The mobile device that is being used should be equipped with a
battery that is able to provide the device enough electricity.
• Other technological constraints. The standard for mobile television isn’t decided yet. Several
standards are for example DVB-H (Digital Video Broadcast – Handheld) and T-DBM
(Terrestial Digital Multimedia Broadcasting). Mobile television can also be provided over
mobile data networks such as UMTS, HSDPA and 3G.
• It is relatively expensive to stream a broadcast to mobile phones.

2.5 Possible solutions

In this section of the paper we offer some possible solutions to some of constraints that are
mentioned in the previous paragraph and some other general ideas.
• It is very important to set the right price for mobile television. Research done by Knoche and
McCarthy 7 show that people would pay £2.50 per day and £10 per month.
• Provide mobile television content especially designed for mobile devices. These can be
shortened episodes for example. Watching television on a laptop is also a form of mobile
television. In this case, the problem of small screens isn’t applicable.
• Obviously technological issues such as battery life should be taken into consideration. This
problem however lies with the developer of the phones. Mobile television providers can make
deals with these developers for instance to provide their phones if they can take care of the
technological problems.
• Deciding on what the standard will be for mobile television is very hard. The standard now
with the largest chance of succeeding is DVB-H. This standard uses less bandwidth and is
cheaper than UMTS and 3G.
• Mobile television content doesn’t have to be streamed to each mobile phone separately. It can
be broadcasted to many mobile devices at the same time.
Furthermore, mobile television providers have to come up with innovative ideas to raise peoples’
interest. Some examples:
• Mobile television providers can make episodes of new series or soaps available to the user
before it is being aired on normal television.
• Create something like interactive television. For example, the appearance of an interactive
voting menu on the screen while the user is watching a program.
• A real time personal TV-guide that lets the user know when his favourite program is on or
when a program that he might be interested in is being broadcasted.

3 OTHER TRENDS AND APPLICATIONS IN M-COMMERCE

3.1 Introduction

In this chapter we will briefly mention some other trends and application in mobile commerce.
Mobile telecommunication companies are concerned that people will use their mobile phone less
for calling, as voice calls are the core business of these companies. Mobile telecommunication
companies will try to keep customers connected to their network by offering them other services

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Knoche & McCarthy, Good news for mobile TV

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as well. A few examples of services that they could offer or are already offering are mentioned in
the next paragraph.

3.2 Different trends and applications

A trend we have seen in mobile commerce is faster internet for mobile devices. A new service
provided by mobile telecommunication companies is 3G broadband. This feature allows
consumers to have a faster internet connection. To use this service consumers have to buy a small
modem and subscription to a mobile broadband provider.
A new application we came across during our research is html-recoding. Html-recoding is a
technique that recodes regular html code into html code that is viewable for the mobile device
that is being used. This way, web pages can be quickly and easily viewed on mobile devices.
A new development is the use of 3D barcodes. 3D barcodes are images that can be found on
poster for example or on the back of a name card. The 3D barcodes can capture up to 1,8 MB of
data. These codes can be used to show short videos of text on mobile devices only if the device is
equipped with a certain application, namely a 3D barcode reader.
Another new application is making payments by the use of a mobile phone. This can be done in
several ways. One example of mobile payments is Payter. Payter gives the consumer the ability to
pay with his mobile phone. The Payter pilot was recently launched in Rotterdam (the
Netherlands). Payter uses a certain wireless technology for secure transactions while another
ways of payment is making payments via SMS.
Location-based services are services where the presence of GPS plays a big role. A lot of the new
phones have a GPS receiver. This makes it easy to install software like navigations software. This
is location based because the user can for instance specify where he wants to go and the phone
will find the shortest path.
The latest innovation in mobile technology is the skype phone. With this phone users can make
free phone calls to other users who also have such a phone. Users can also sms and make calls to
regular cell phones and fixed line phones on pre-pay basis.

4 SUMMARY
4.1 Conclusion

To answer the question whether mobile television will be a success or not, we have stated some
critical aspects on chapter 2 along with some possible solutions. First of all, the providers of
mobile television will have to come up with innovative ideas on how to bring mobile television to
the market. We mentioned things like being able to vote during a broadcast with an interactive
menu. Second of all, they will have to come up with the right price setting. People will not accept
mobile television when it is offered at a price that is too high. Mobile telephone companies must
use their resources efficiently by broadcasting television content to multiple users at the same
time instead of streaming to each user individually.
Telecom companies have to deal with the fact that people are using alternative methods for
mobile phone calls. They deal with this loss by trying to keep customers to use their network.
They are doing this by offering customers other innovative services like mentioned in chapter 3,
for instance 3G broadband and HTML recoding.
So, to answer the research question, we think that mobile television will be a success provided
that telecom companies take into account the suggestions we mentioned in this paper.

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4.2 Limitations of the study

This research has some limitations. First of all, to know all the trends, we have to visit more than
two telecommunication companies, but this is impossible because of the time constraint we are
facing. The second limitation is that we have experienced that telecommunication companies are
a bit reluctant to share their innovations, as these innovations are very valuable to the companies
to gain a possible competitive advantage.

4.3 Recommendations for further research

It might be interesting to do further research on the acceptance of some of the other mobile
innovations that we mentioned in this paper. During this research we learned that people in Asia
are more interested in mobile television than people in Europe. It might be interested to look at
how providers marketed mobile television in Asia and see it these marketing strategies can be
applied in Europe too.

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References
Melissa A. Schilling. Strategic Management of Technological Innovation. McGraw-Hill, 2007

Andreas von Meyer zu Knonow and Mann A. Shoffer. From e-Commerce to m-Commerce: A
new Competitive Environment for Wireless Vendors. Sloan School of Management in Partial
Fulfilment of Requirements for the Degree of Master of Science in Management of Technology
at the Massachusetts Institute of Technology. May 2000

David Amselem. Mobile TV Production – Expectations, Challenges and Strategie. April 2007

Hendrik O. Knoche, John D. McCarthy. Good News for mobile TV. July 2005

Olaf van Miltenburg. 3D code kan video bevatten voor mobieltjes. Hcc! magazine nieuws

Websites
http://www.juniperresearch.com/shop/viewpressrelease.php?pr=57
http://www.theregister.co.uk/2007/09/20/mobile_tv_report/
http://www.vodafone.ie
http://www.ammeon.com
http://www.tns-nipo.com/print.asp?id=c001&file=persvannipo\tv_kijken_op_mobiel07.htm

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 INNOVATION & ICT

VRiSBI International Research Project Ireland 2007

Study Association VRiSBI

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VRiSBI is the study association for the study Economics & Informatics at the Erasmus University
Rotterdam. We have over 350 members and there are around 100 students currently in their final
year of the bachelor or master program.
One of our most important tasks is to connect students of Economics & Informatics with
companies to give them an inside look how it is in the field. We try to do this by regularly
organizing different kinds of activities in association with interested companies.
The development and the pleasure of learning for the student is important to us. We do this by
organizing all kinds of activities like company visits, study trips, symposia, etc. etc.
This report in front of you is part of the VRiSBI International Research Project Ireland 2007. The
CD-Rom contains all the reports and it also contains the presentations from the symposium
‘Innovation & ICT’.
ISBN of the complete report: 978-90-812660-1-7

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VRiSBI International Research
Project

“Innovation and ICT”

Comparing Ireland with The
Netherlands

Please visit http://studiereis2007.vrisbi.nl for the

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