ws today from Cingular announced the availability of an LG cell phone (LG CU500) that supports their HSDPA (high speed data packet access) 3G vintage network. With it, customers can finally get higher speed downloads to a cell phone supporting advanced video services-moving the company towards parity with rivals Verizon (V-Cast) and Sprint (MobiTV) mobile video offerings.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly

Up until now, Cingular, originally an SBC/Bell South venture (see 3-6-06 Display Daily for the scorecard on ownership) only offered customers access to the next generation network via laptop modems or PC cards and focused on access to Internet information and communication services at download speeds rated between 4 and 700Kbps with burst speeds as high as 1Mps.

With the new LG phone and a Samsung version waiting in the wings, the company can expand these services to cell phones plus offer the higher speed access to news, sports, movie trailers, and clips from TV shows as well as the Cingular Media Net bundle of services.

To date, the Cingular GSM based network has limited cell phone users to its EDGE (Enhanced Data GSM Environment) that tops out at 135Kbps, a bit too slow for real-time video and up until now, no match for the CDMA network high speed version called EvDO (short for Evolution Data Optimized.) used by rival Sprint and Verizon.

With EvDO, the two companies seized the high-ground in mobile video and are now in their second generation offerings of mobile TV services. For example in May, Sprint announced the first free, fully ad-supported mobile TV channel, targeting the 18-34 year old male demographic with programming called "The Fast Lane." The clips will run as a free service in Sprint’s "Media Player" section alongside fee-based offerings like Sprint TV and will include 2- to 2 ½ minutes of short poker tips, car- racing clips, comedy and sports selections. The ads will last up to15 seconds and will be placed 20 to 30 seconds into the clip-evolving from the old model of up front advertising.

Analysts speculated the move was in response to lackluster results in Sprint’s MobiTV fee-based offerings. "Inside Hollywood," runs on Sprint for $4.99 a month, with a subscriber base of 3,000 of a potential audience that could be as high as 1M viewers. But Sprint’s goal is 250K to 300K viewers with the free mobile TV service.

Our take: The pressure is on Cingular now to go beyond first generation offerings with mobile TV. They took a step in the right direction by setting a low-cost entry point with the LG CU500 handset, offering a $50 rebate on a $99 phone. Cingular’s next step should be an ad-based, free-service offering like Sprint’s "Fast Lane" to kick-start the program and build excitement in the channel. History is on the side of the ad-based approach (it built network TV in the 1940’s) and for the end-user the economics of free, works every time. –SS