|
Broadband Access
C5: BNP Paribas Bearish On Mobile Data
Bank Sees Little ROI From Mobile TV, Music And Advertising
by Iain Morris
Investment bank BNP Paribas threw a long shadow over next-generation mobile data services at the C5 World Forum in Milan today, arguing that operators investing in them face ‘rising costs and a big risk of cash-flow squeeze’.
Speaking on the topic of the mobile internet, Antoine Pradayrol, the head of European telco research for BNP Paribas, says that even if 3G penetration across Europe reaches a healthy 38 percent by 2010 (up from 16 percent today), and users are generating ARPU of €5 (US$6.67) per month, total market revenues will amount to just €10 Billion (US$13.3 Billion).
While that may sound promising, a large number of operators will be delving into that revenue pie. They will also encounter service competition from new players in the value chain – such as Web-based companies – while having to bear the costs of expensive network-technology upgrades.
That said, Pradayrol feels the widespread availability of 3G is starting to work in favor of the mobile internet generally – especially as HSDPA rolls out. He is also optimistic about the emergence of so-called Web 2.0 and the burgeoning interest in user-generated content.
Broadcast TV a turn-off?
Pradayrol reserves more venom for some of the operators turning to broadcast technologies, such as DVB-H, to push mobile TV services.
“DVB-H investments will need to be shared,” he says. “There will not be enough mobile TV revenue for one operator [per DVB-H network].”
Pradayrol says that projected market revenues of €3 Billion (US$4 Billion) by 2010 will not be enough to justify multiple broadcast networks in many countries, and advocates the network-sharing model being pursued in Germany (see Virgin bets on DAB), whereby a number of operators share the cost and usage of one deployment.
The issue then, of course, is how operators will distinguish their services from those of competitors on the same network.
“Presumably you’d have them offering different packages of channels on that network,” says Windsor Holden, a senior analyst with Analysys. “They would obviously seek to brand it in a slightly different way.”
Downbeat on music and advertising
As far as Pradayrol is concerned, mobile music is likely to have a negligible impact on an operator’s business because the gross margins will be so low.
“The market is already crowded and complex,” he says. “Even if operators captured 20 percent of the available market, it would boost their EBITDA by just 0.3 percent.”
And he is almost as dismissive of mobile advertising. While it will represent a €1.5-3.5 Billion (US$2 – 4.6 Billion) market opportunity by 2010, according to BNP Paribas, Pradayrol reckons operators will most likely lose out to better-positioned internet rivals in this space.
More Information:
Virgin bets on DAB
Will people pay to watch a handful of free-to-air terrestrial TV channels on their handset? Virgin Mobile says yes
CTIA: Applications Developers Using PC-Mobile Umbilical Cord
Services Target Ubiquitous Access to Stored Video, Data and Music Content
IPTV 2007: PVRs/DVRs Boost Subscription TV Revenues
However, Questions Are Raised About Advertising Revenues
BT’s IPTV Vision
BT angles for a slice of the UK’s vibrant pay-TV market. What are its chances?
|
