It had been in Beta trials in New Your since January. The Pocket PC Phones built by HTC could receive six channels of live video from CNBC, MSNBC, Fox News, Fox Sports, Discovery Channel and E!. But Modeo is abandoning it efforts to commercialize the technology, leaving a blemish on sluggish rollout of mobile TV services in US. However unfortunate this result is, it is no surprise to some in the industry. So what are some of the reasons Modeo’s approach has failed? Read on…

John DiLoreto
Analyst and Editor for
Insight Media

After spending four years developing and initiating a wide-scale mobile-TV test in New York, Crown Castle plans to give up the 1670-1675 MHz (L-band) spectrum it planned to use for subsidiary Modeo’s mobile TV service, leasing it to Telcom Ventures and Columbia Capital for $13M a year through October 2013. The spectrum will be used for an undisclosed venture.

Crown Castle, which operates and manages more than 22,000 cellular towers in the US, said it would incur $10M of costs in 2007 related to Modeo, apparently cutting its losses after failing to line up go-to-market partners. A representative did not respond by press time.

With Crown Castle throwing in the towel, Qualcomm appears to be winning the battle to deliver broadcast TV services to mobile handsets. So far, Verizion Wireless, is the only wireless carrier in the US to deliver live-TV channels and it’s based on Qualcomm’s MediaFlo technology, an alternative to the DVB-H standard. AT&T has also signed up with Qualcomm to offer a service with MediaFlo, giving MediaFLO distribution with the two biggest wireless carriers in the US.

One other service besides MediaFLO that remains is Aloha Partners’ HiWire, which last week began consumer trials in Las Vegas providing 24 local and network channels over DVB-H for its Las Vegas trial. (MobiTV’s content-distribution is geared toward on-demand, not live video.)

Industry players think its unfortunate but not a surprise that Modeo has pulled the plug. Some of the issues with Modeo were technical, such as limited channel bandwidth of 5MHz. Also, MediaFLO and Hiwire services are carried over UHF vs. L-band, whose longer wavelength provides better coverage and penetration in buildings and urban areas.

Modeo also suffered from lower power. With a recent FCC waiver for larger markets, it could broadcast at 12.5kW vs. 50kW for UHF broadcasts, but still a disadvantage. The limitations in bandwidth and power results in lower channel capacity, which is why Modeo could only carry six channels, compared to the 8 and 24 offered by MediaFLO and Hiwire, respectively. Other implications are higher network build-out and annual maintenance costs.

However, according to Hiwire president and COO, Scott Wills, the number one issue inhibiting large-scale advancement of mobile TV services is that "major wireless carries and cable sat operators have to believe that there is a significant demand for mobile TV. Today it is questionable. No one has been able to quantify consumer demand or demonstrate business model that will drive mass adoption," he said.

Qualcomm, on the other hand, has been in a unique position to build out a network because it also makes chips used in handhelds. Strategically, it can leverage chips sales by building out a technology demonstration platform. But using free auction credits to buy spectrum and spending $800M in building out a network, its investment pales in comparison to the billions spent on DVB-H, according to Wills.

I guess we’ll have to wait and see which remaining approach will win, and how fast it will be rolled out. In the meantime, unserved mobile subscribers with a data service and the right phone can rely on a Slingbox and home TV service to get their fix of live mobile TV.

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