Look and learn

On November 16, the deadline for the submission of proposals to acquire a mobile TV licence to operate in the UAE expires. The country’s Telecommunications Regulatory Authority has consulted widely about the best way in which to usher in the service, and the terms of the tender document offer an insight into the type of business model the licensee can be expected to develop

The mobile TV licence on offer in the UAE permits the successful bidder to roll out a mobile TV network and to begin offering transmission services. It will be allowed to sell the mobile TV transmissions to retailers in a non-discriminatory manner, acting as a provider of mobile TV service on a wholesale basis to retailers. The cost of the 10-year licence amounts to AED17 million (US$4.7 million), together with an ongoing annual licence fee amounting to the higher of: one per cent of the revenues earned in a year; or AED100,000.

The licensee will also be required to pay an annual royalty, equivalent of 30 per cent of its net profit before the royalty. Shareholders in the new licensee will be limited to the GCC, while the deadline for the submission of bids has been extended from October 19 to November 16.

It is significant that the UAE TRA has opted to only offer a single mobile TV licence given that both incumbent operators in the country have expressed an interest in the service and have been piloting services.

At the end of last year, Etisalat claimed 200,000 mobile TV subscribers, having launched the service in February that year. In November it announced it had reached an agreement with the Board of Control for Cricket in India (BCCI) for the delivery of 20 days of live cricket to Etisalat’s mobile TV customers in the UAE.

Etisalat charged AED35 per week for access to the cricket content, while customers subscribing to it must already have an existing subscription to the telco’s mobile TV services. At the end of last month the UAE operator also announced the addition of channel Noor Dubai to its current mobile TV channel list of 20.

“Mobile TV is becoming immensely popular in this part of the world. The increased usage and adaptation has encouraged Etisalat to add more channels and offer rich and diverse content to its customers through an innovative medium. In the future, we intend to add more channels and create exciting features for our customers, based on their content preferences,” said Khalifa Al Shamsi, the vice president of marketing/ consumer & SMB at Etisalat.

The channels offered by Etisalat include Holly Quran, Abu Dhabi Sports, Dubai Sports, Abu Dhabi TV, Al Arabiya TV, BBC World, CNBC Arabiya, Emirates, MBC, Al Jazeera, Al Jazeera International, Sama Dubai, Sharjah channel and Kairali – a Malayalam language channel.

Last October Dubai free zone Dubai Media City announced its was trialling DVB-H, the de facto standard for mobile TV, in partnership with the UAE’s second communications provider du. The trial extended to the broadcast of 12 television channels and was tested on 500 friendly users utilising Nokia handsets.

The development of the mobile TV licensing process in the UAE is likely to be looked upon with interest from other markets looking to move in a similar direction. In South Africa for instance, where preparations for the hosting of the 2010 FIFA World Cup are at an advanced stage, the mobile operators are looking to develop compelling digital content and programming.

Earlier this year, South Africa-based pay TV operator MultiChoice commented that a lack of policy direction from the Department of Communications was holding up the commercial launch of mobile TV in the country.

At the beginning of May, MultiChoice Africa launched DStv Mobile, in Kenya providing a range of TV programming to mobile subscribers who buy a Safaricom DStv Mobile handset. At the time, the launch marked the third country in Africa to launch mobile TV, with Nigeria and Namibia leading the way.

However, it remains unclear as to when MultiChoice will launch mobile TV in South Africa, despite the fact that the company has successfully tested the service for some time.

MultiChoice has been unable to commercialise its mobile TV service in South Africa as it requires to the Independent Communications Authority of SA (ICASA) to issue it with a relevant licence.

In August, South Africa’s Department of Communications announced it wants mobile TV licensed by the end of Q109. There have been apparent delays due to the finalising of policy regarding cross-media ownership issues.

According to South African media reports, South Africa’s Electronic Communications Act imposes restrictions on companies and individuals controlling newspapers
from owning commercial broadcasting services under certain conditions.

MultiChoice currently dominates the satellite pay TV market and is a wholly-owned subsidiary of newspaper giant Naspers. MultiChoice is keen on entering the mobile TV
market and has run a trial of DVB-H broadcasting with mobile operator Vodacom.

It also on-sells some of its satellite bouquet to Vodacom for broadcast over 3G. MultiChoice said it was “excited and encouraged” by government’s new push for mobile TV. But Naspers’ dominance in the newspaper market and satellite environment may affect its mobile TV prospects.

“ICASA must license [mobile TV providers] with some flexibility, but taking into account cross-media ownership,” commented Department of Communications director-general Lyndall Shope-Mafole. She added that the country’s cabinet was keen to open up the pay TV market and wanted a “diversity of operators”.

Vodacom has said that it is going to wait and see on the outcome of the DVB-H license process – it already streams around 24 channels to 31,000 3G subscribers.