Crown Castle International is selling off its mobile television business, called Modeo. Crown has agreed to lease Modeo’s nationwide spectrum for a dedicated mobile broadcast network to a pair of venture capital, reports RCR News.
The Houston-based tower company bought spectrum at 1670 – 1675 MHz nationwide several years ago at a bargain price and hoped to spin off a mobile television business from it. Now Crown will rent the spectrum for $13 million a year to a venture formed by Telcom Ventures L.L.C. and Columbia Capital L.L.C. effectively immediately.
Crown Castle will take a one-time hit of $10 million in “operating and general administrative costs” related to its aborted Modeo business, and will write off all its Modeo assets other than spectrum in the third quarter of this year.
The lease agreement includes assets related to Modeo’s DVB-H trial network in New York, says the company. How the joint venture will use the spectrum, though, remains a mystery, says RCR News.
While the aim of the Telcom Ventues-Columbia Capital joint venture is unclear, it may look to tweak Crown Castle’s service but continue to target wireless users with entertainment content. Both Telcom Ventures and Columbia Capital have invested substantial amounts in XM Satellite Radio Inc., and Columbia’s mobile investments include Amp’d Mobile, broadband chipmaker Sandbridge and the wireless advertising startup Millennial Media.
Competitor MediaFLO USA, a spinoff of Qualcomm, is only a few months away from its second carrier deployment, says RCR. Perhaps MediaFLO’s second carrier will be Sprint with their VUE service, although others speculate it will be AT&T. Analysts say finding a business model without a wireless partner will be a challenge for operators of mobile multimedia networks.
The only other mobile TV competitor is Aloha Partners L.P., which is building the HiWire network. The company is still in the testing stage, and recently announced a lineup of 24 channels for its Las Vegas trial using the DVB-H standard, the same one used in the ill-fated Modeo system.
Mobile television revenues will increase to more than $1.8 billion in 2011, says Daniel Winterbottom, a senior analyst at Informa and co-author of Informa’s “Mobile Entertainment” report.
The number of U.S. mobile subscribers watching video on their cell phones more than doubled this March to 8.4 million people, compared with 12 months earlier, according to the research firm Telephia. Still, that’s only 3.5% of all U.S. wireless users and most aren’t watching live TV channels like MediaFlo’s. Datamonitor predicts mobile TV will reach 155.6 million subscribers worldwide by the end of 2012, up from around 4.4 million mobile TV subscribers today. Mobile video revenues in the U.S. totaled $146 million in Q1 2007, growing 198 percent year-over-year.
It’s ironic that the hand-wringing over 700 MHz spectrum appears to be exacerbated by the FCC’s own rules — they encouraged 50,000 watt mobile television transmitters on the lower 700 MHz band. Now, low-power, two-way communications on adjoining 700MHz channels are problematic due to interference from mobile tv transmitters.
Qualcomm’s MediaFlo has channel 55, while Aloha Partners’ HiWire has channel 54 & 59. Verizon could pick up channel 56 at the auction. That would leave blocks “A”, adjoining mobile tv broadcasters on channel 56, and block “B” — which would appear to be the only decent 12 MHz chunk for 2-way in the entire lower 700 MHz block.
Who benefits from that?
The FCC has traditionally made rules around the interests of cellular carriers. Now they have to deal with new competitors and angry consumers.
Related Mobile TV articles on DailyWireless include; HiWire: 24 Mobile TV Channels, Mobile/Handheld TV: Killer App?, Mobile TV War at NAB, NAB 2007: Dead Man Walking?, MediaFlo Debuts March 1st, NYC Mobile TV Delayed, Hiwire Moves on Mobile TV, and Mobile TV: Six Flavors.
