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7/13/2010
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Mobile TV Stalls In China

Few willing to pay to use China multimedia mobile broadcasting service.

Commercial development of China's mobile TV service is falling far short of expectations. Of the 1.5 million users of China multimedia mobile broadcasting (CMMB), less than 3% are actually paying for the service, creating something of an embarrassment for China Mobile, the main backer of the standard.

CMMB was developed by the State Administration of Radio, Film, and Television (SARFT) based on Satellite and Terrestrial Interactive Multiservice Infrastructure (STiMi) developed by TiMiTech, a company belonging to the Chinese Academy of Broadcasting Science. The standard was announced in October 2006 and is similar to Europe's Digital Video Broadcast-Handheld (DVB-H) broadcasting standard. Since then CMMB has been rigorously promoted by China Mobile and is bundled with its 3G network.

Sources say that by the end of the second quarter, 2010 domestic sales of CMMB handsets were around 1.5 million, approximately 30% of total 3G mobile phone sales at China Mobile, and much lower than the 50% target set by the operators. The service has been operational for more than a year but formal fees have only recently been introduced, which range from $1 to $3 per month. The small take-up of the service since fees were introduced does not bode well for the future of mobile television in China.

China Mobile was hoping to attract more paying customers with its World Cup offering, but this may have been wishful thinking. Analysts believe that the company's broadcasting and mobile communications divisions are lacking in unified policy and have no clear development path.

The lion's share of CMMB chip technology comes from two companies -- China's Innofidei and Israel's Siano. With widespread proliferation of cheaper "shanzhai" -- or copycat -- handsets, it is difficult to reach all potential customers. The CMMB technology is expensive and can only be found in specific dedicated smartphones.

Furthermore, there are more attractive and diverse streaming packages available from third parties. A clear advantage needs to be provided in order to entice users to use CMMB. China Mobile insiders say that they need to be following the advertising model used by mobile broadcasters in other countries because people are unlikely to pay for content, especially if they can find that content for free from a regular TV or desktop computer.

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