Big Surprise: Mobile TV Ain't Burning Up The Airwaves - InformationWeek

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Commentary
1/21/2008
10:31 AM
Eric Ogren
Eric Ogren
Commentary
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Big Surprise: Mobile TV Ain't Burning Up The Airwaves

Qualcomm, owner of mobile TV technology MediaFLO, issued a proxy statement that revealed some details about the company's costs and revenues--or lack thereof--to date. I don't think it's much of a shocker to learn that the mobile TV business is off t

Qualcomm, owner of mobile TV technology MediaFLO, issued a proxy statement that revealed some details about the company's costs and revenues--or lack thereof--to date. I don't think it's much of a shocker to learn that the mobile TV business is off to a slow start.As of yet, Verizon Wireless is the only U.S. carrier to actually launch mobile TV service with Qualcomm's MediaFLO technology. AT&T has also committed to using MediaFLO, but delayed its launch from late 2007 to sometime early this year. That delay had to have hurt Qualcomm a little bit, and the numbers from the MediaFLO division tell us that it did.

Qualcomm Strategic Initiatives, the controlling division that oversees MediaFLO, reported a loss of $240 million for the 2007 fiscal year. This is a larger loss than the one it faced in 2006, which was only $133 million. The statement points out that MediaFLO alone accounted for half of the division's losses, sucking $118 million from the company's coffers. Further, it helped Verizon advertise the TV services to the tune of $20 million.

While Verizon has yet to share any real data about its mobile TV services, which has been operational for more than nine months, these numbers give us all the indication we need. If mobile TV had taken off like a rocket, it's safe to assume Qualcomm's losses would be less.

But we do have to cut Qualcomm some slack. The expense of rolling out its MediaFLO network is substantial. It has to buy the spectrum and then set up, test, and launch each market as the spectrum becomes available. Given how slow Verizon has been to add markets to its mobile TV services, this is taking some time. Presumably, when AT&T launches its own mobile TV service, it will be able to use all the same markets that Verizon already uses.

Another thing hurting the mobile TV business is the lack of handsets that are compatible with MediaFLO. To date, Verizon offers only four mobile phones that can snag the mobile TV signals. Two of them were announced a year ago and are less than stellar handsets. The latest entry is LG's Voyager device, which is still in its second full month of general availability.

Once Verizon (and AT&T) increase the appealing number of handsets that can access MediaFLO, the more likely they are to sign up more customers and recoup some of their--and Qualcomm's--investment.

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