Taiwan Plans to Award Technology-neutral Mobile TV Licences

By: Charice Wang, Ovum
(Business News & Technology News, 4 Nov 2009)

Recently, Taiwan's Ministry of Transportation and Communications (MOTC) released a draft proposal for the release of two nationwide mobile TV licences in 2010. The auction will be based on the principle of technical neutrality and has so far attracted a lot of interest from various industry players. It follows the trial of mobile TV by five players 2007–08. We see the proposal as a positive move by the Taiwan government to encourage mobile TV development. However, a clear regulatory approach will also be needed.

Technology neutrality is welcomed, but it also brings challenges
The principle of technology neutrality for mobile TV licences is key to the scheme. It allows operators to use any standard of mobile TV, which is one of three important principles outlined by the regulator to encourage the development of new technologies and services – with the other principles covering efficient planning to make use of scarce resources, and the allocation of the licences in a fair, open and efficient manner.

In contrast, European Commissioner Viviane Reding recommended a single standard (DVB-H) for mobile TV across Europe. Reding justified this departure from the principle of neutrality by saying that using a particular standard of DVB-H would help mobile TV services develop the economies of scale they needed to launch EU-wide services. Reding also stressed that technology neutrality is a principle not a dogma.
Taiwan shares similar cultures and has deep economic ties with its neighbours. The technology neutral approach will therefore bring some challenges for Taiwan, including reduced opportunities due to economies of scale. The standards most likely to be chosen in Taiwan are DVB-H and MediaFLO (developed by Qualcomm), which are different to the standards used by most of its neighbours, with CMMB in China, ISDB-T in Japan and DMB in Korea.

Various players have set their sights on licences
The prospect of the upcoming mobile TV licences has attracted the attention of various players, including broadcasting providers, 3G operators, ISPs, equipment providers and value-added services providers. This time we are seeing various industry players showing interest, in comparison with the trial services where the most interest came from broadcasting providers. Five players undertook trials in 2007–08, with regional mobile TV licences issued by the regulator NCC. The majority of the trial players were broadcasting providers, such as China Television (CTV), Public Television Service (PTS), Chinese Television System (CTS) and Taiwan Television Enterprise (TTV). The trial was ended in 2008 with the regulator failing to provide a clear policy for mobile TV.

This time around, 3G operators are also expressing an interest in mobile TV. Taiwan Mobile and Qualcomm expressed an interest in bidding for the mobile TV licences when the government originally announced the draft plan. Recently, Qualcomm and Cheng Uei Precision Industry set up a joint venture in Taiwan to target mobile TV services. With only two nationwide licences on offer in 2010, there is likely to be fierce competition during the bidding.

Although the upcoming licences are attractive, unclear regulation for mobile TV is still an issue
Clear policy decisions about the licensing scheme must be made as soon as possible. Currently, the regulation of the telecommunications and broadcasting industries is done separately, via the Telecommunications Act and the Broadcasting Acts respectively. Therefore, the most debate is around which regulatory area mobile TV, as a converged telecoms and broadcasting service, should fall under.
The Broadcasting Act contains some limitations, such as no foreign ownership and the restriction of players with government ownership from operating media. Therefore, under the Broadcasting Act, Chunghwa Telecom would be legally prohibited from offering mobile TV services since the government maintains an approximate 35% stake. This might restrict the development of mobile TV, thus the industry has proposed that mobile TV be regulated under telecoms rather than broadcasting legislation. We believe the uncertainty surrounding its regulation will hamper the take-up of mobile TV, and it is therefore of the upmost importance that an appropriate regulatory approach to converged services is developed.