TV Digitale Mobile: Right Place, Right Time?

With its hugely popular TV Digitale Mobile service, 3 Italia has defied the analysts predicting a grim fate for mobile TV. But is its success a short-term illusion conjured up in the carnival atmosphere of the World Cup?

That’s the assessment of Windsor Holden, a senior analyst with Analysys Research, who believes the summer surge in subscriptions will have tailed off by winter. “I would be astonished if they had a subscriber base of much over 350,000 by the end of the year,” says Holden.

TV Digitale Mobile was launched in June and had garnered a whopping 100,000 subscribers by mid-July. Nine channels were available at launch, but 3 Italia is planning to offer 20 by the end of the year and 40 by 2008. Customers have various options to choose from. These options include monthly subscriptions to pay- per-view programs. “In Italy, where 90-odd percent of the subscriber base is prepaid, you have to offer pay-per-view options from the start,” says Holden.

What makes the runaway success of TV Digitale Mobile so surprising is the prices that users seem prepared to spend on services. While most trials have shown an upper limit of around €10 per-month, 3 Italia’s premium package is charged at three times this sum.

Holden thinks that timing has worked in 3 Italia’s favour. “[Take-up] was obviously driven by the fact that they had World Cup content from the start. The numbers probably went up given that Italy ended up winning.”

More importantly, he says, the company avoided shelling out as much as €300 million on network rollout by acquiring the existing DTT network of broadcaster Canale 7. “They paid €35 million for that, which is a fraction of the cost for all the effort, and its worked like a dream.”

As a result, 3 Italia has been able to reap the benefits of widespread coverage – Canale 7’s network was rolled out across much of Italy, with 1,000 transmitters reportedly covering 2,000 cities and towns – and invest the money it saved on capex elsewhere.

The savings have also allowed it to encourage service adoption by offering handsets to users at subsidised rates or even as free upgrades. With off-the-shelf devices costing up to as much as €600, this has obviously had a major impact.

Holden does not believe 3 Italia’s business model is unlikely to see much replication in other parts of Europe. “Unfortunately for the mobile operators, there aren’t that many broadcasters in the market selling a DTT network. 3 [was] just in the right place at the right time,” says Holden.

(c) TelecomMagazine

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