Wireless-chip giant Qualcomm Inc. appears ready to launch its new mobile video service by late 2006 — with a significant twist.
The service — dubbed “MediaFLO” — will use its new “forward link only” (FLO) wireless-broadcast technology to sell multichannel content wholesale to wireless carriers, which will be able to customize packages for subscribers. And it will use a slice of the UHF broadcast TV spectrum to do it.
While still in development, Qualcomm's quirky new approach may help more efficiently pipe multimedia content over wireless networks — at least eventually.
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“Where FLO fits is that wireless networks are built largely to support communications,” said Linda Barrabee, a senior analyst at The Yankee Group. “They aren't built for mobile broadcast products.”
Existing services, such as Berkley, Calif.-based Idetic Inc.'s MobiTV product and Verizon Communications Inc.'s new VCast service, use the unicast model, which involves sending video directly to each phone on a point-to-point basis.
While not as efficient, unicast services are more easily deployed, available to many existing cell phones and primed for interactivity. (MediaFLO will be a one-way broadcast service, although carriers could combine it with unicast services to create interactive content.)
MobiTV, which currently powers the mobile video services of Sprint Corp., Cingular Wireless and AT&T Corp. in the U.S., offers nearly 30 channels of live TV content to more than 300,000 subscribers.
Content providers include The Weather Channel, CNBC, C-SPAN, The Discovery Channel and several other staples of cable.
MobiTV chief operating officer Paul Scanlan said Qualcomm's service could offer long-term benefits to help meet future demand for mobile video services.
“I think what they're doing is actually very complementary to what we do,” he said. “The question is: When do you need it?”
Barrabee estimated that there are some 500,000 mobile-video subscribers currently in the U.S., a take rate she calls “pretty decent” considering the infancy of the market. However, she noted, it's still a small portion of the 188 million U.S. handsets.
As demand increases, Qualcomm appears to be positioning itself for expected future growth. Unlike existing mobile video services, MediaFLO will only be available to people who purchase the newest high-end cell phones equipped to receive signals over the 716 MHz to 722 MHz frequency band.
“They're going to be expensive phones, and it's going to be a while before they get out on the market,” said Scanlan. “By the time those handsets are out in mass volume, we'll have millions of subscribers.”
Qualcomm, which paid $38 million to secure that 716 to 722 MHz slot in a Federal Communications Commission spectrum auction last summer, plans to offer 20 live television feeds and some 80 on-demand channels.
The slot is now occupied by channel 55 on the analog UHF broadcast spectrum. According to the National Association of Broadcasters, 13 analog and three digital broadcasters currently occupy that slot in different markets nationwide. So Qualcomm may not be able to secure national coverage right away.
“We'll just continue to build out the market,” said Jeff Lorbeck, MediaFLO's senior vice president and general manager, adding that the company plans an October 2006 launch of the service no matter what — even if some markets aren't ready.
In the meantime, Qualcomm has been striking deals with TV channel 55's occupants around the country. Examples include recent deals with WACX in Orlando, Fla., and KWDK in Tacoma, Wash.
The FCC must review those and any other deals to determine whether Qualcomm's service will interfere with other TV broadcasters still transmitting analog signals in various local markets.
In June, Qualcomm complained that the current FCC interference rules are too vague and asked that the agency allow it to use established methodology when determining interference levels.