While the U.S. and Europe wait for decent digital TV on their cell phones, SK Telecom delivers.

February 10, 2005

Seoul – Video streaming to mobile handsets has been around for years now, and is still perennially trumpeted as the next killer application in mobile data. Plagued as it’s been by glitchy, freeze-frame images and high price points, it isn’t hard to see why Europeans and Americans aren’t watching their favorite shows on their cell phones just yet. But while mobile video broadcasting hasn’t gotten off the ground yet in the West, in the telecom wonderland of South Korea, digital multimedia broadcasting—DMB—is already, quite literally, in orbit.

In March 2004, leading Korean mobile carrier SK Telecom launched a satellite to begin satellite-based DMB (S-DMB) service, a technology similar to code division multiple access (CDMA) that offers a much greater area of coverage and broader bandwidth than existing terrestrial DMB (T-DMB) networks. In September, SKT signed an agreement for co-ownership of the satellite with Japan’s Mobile Broadcasting Corporation (MBCo). Though MBCo originally planned to kick off DMB service late last year, the company has been forced to delay commercial deployment because of limited base stations and poor handset selection. Meanwhile, newly created Korean firm TU Media—a 200-company consortium of carriers, broadcasters, content providers, and handset makers whose major shareholders include SKT, privately held TV network SBS, and mega-vendor Samsung—has secured the backing of government regulators and will begin commercial subscriptions this spring, beating Japan to the punch.

“This will change your lifestyle,” South Korean Minister of Information and Communication Daeje Chin told us in Seoul (see “South Korea: Fighting to Stay on Top”) as he handed over a prototype DMB handset. On screen was a live soccer match, fluid, crystal-clear, and with good sound. “Eighty percent of Koreans now have a camera phone, and 80 percent will have a DMB phone in the next couple of years,” predicted Mr. Chin.

Samsung and LG have already developed S-DMB terminals with screen sizes of up to 7 inches, and are set to announce the release of handsets and car terminals that can handle both S-DMB and T-DMB broadcasts in a single chip. In trials, reception did not degrade even at speeds in excess of 150 kilometers/hour.

SKT/TU Media still face challenges in deploying S-DMB—chiefly from its terrestrial counterpart, T-DMB, which, while boasting picture quality on par with S-DMB, will charge no usage fee. T-DMB, however, offers fewer channels and its coverage is still limited to the Seoul metropolitan area while S-DMB is peninsula-wide. SKT currently plans to charge S-DMB subscribers a $17 initiation fee plus a $10 to $13 monthly fee, with additional premium services for $4 each. The carrier plans to operate 11 video, 25 audio, and three data channels—much greater than T-DMB’s three video channels and nine data/audio channels. In a recent report, San Jose, California-based research firm In-Stat estimated total deployment costs to TU Media at $340 to $680 million; In-Stat quotes Korean carrier targets of 420,000 subscribers in 2005, reaching 6.13 million by 2010, and forecasts total domestic S-DMB revenues of $800 million by 2010.

That’s not the only place SKT plans to make its money, though: the DMB standard was approved by the UN’s ITU last November as a mobile multimedia broadcasting standard, and SKT is confident that DMB will be adopted as a worldwide standard, superseding the European DVT transmission system, Nokia’s DVB-H, and Qualcomm’s FLO media-casting technology—and bringing in billions in IP licensing fees for Korean vendors down the road.