[Satellite News 08-11-08] The European Commission (EC) unveiled Aug. 7 the selection procedure for operators seeking a license to provide pan-European mobile satellite services. Satellite operators will for the first time be able to offer services such as high-speed data, mobile TV, disaster relief and remote medical services under a single European selection procedure instead of under 27 different national systems.
    The new procedure could allow companies to offer innovative wireless services throughout Europe over a specifically reserved spectrum as early as 2009.
     “The EU (European Union) is determined to facilitate the conditions for Europe to lead in mobile broadcasting,” NSR analyst Carlos Placido told Satellite News. “Dealing with a single license helps in the platformization of these services, which need to integrate with other systems and become regional from day one.”
    The proposal is a potential boost for SES and Eutelsat, which are targeting this area with its Solaris joint venture. Solaris plans to target the mobile broadcast and multimedia services market using an S-band payload, which will be placed on Eutelsat’s W2A spacecraft.
    Other companies that may seek the pan-European license, according to an October report from TMF Associates, are Inmarsat, which has ordered an S-band satellite from Thales Alenia Space, and TerreStar, which has an agreement with Telekom Austria to undertake “a joint investigation of MSS/CGC opportunities” and is seeking investors in TerreStar Global, which will develop the company’s European business.
    ICO also maintains that it has a legacy claim to the spectrum in Europe by virtue of launching the ICO-P1 satellite — part of its original constellation — in November 2000. However, this legacy claim was not recognized by the EC. Systems also have been proposed by Thuraya and Ondas.

Market Questions Remain
    While the new rules will help make it easier for companies to begin services, the market for mobile services remains in question, according to analysts.
    “The decision is an important step but  it is not, in our view, a massive boost for satellite mobile broadcasting in Europe because of the number of other conditions that need to be aligned to make these services a success,” said Placido.
    Eric Beaudet, a satellite equity analyst at Natixis Securities said, “I think it is a necessary step, but for me, mobile broadcasting will remain a niche market for satellite operators. Mobile television has had hype for many years. But, is there really a need for TV on mobile? That question remains open,” he said.
    The recent experience of Japan’s Mobile Broadcasting Corp. (MBC), which said it will shut down its nearly four-year-old mobile service due to lack of subscribers, should serve as a clear warning sign to mobile satellite players in Europe and beyond. “The popularity of One-Seg (terrestrial) free services in Japan is believed to have contributed to the demise of MBC,” said Placido. “Europe has a strong history of free-to-air television, but so far mobile TV services have been subscription-based with limited success. Free-to-air mobile TV services have proved to be the way to jump start demand, but the monetization of these services still needs to evolve.”
    Beaudet believes the dynamics for mobile broadcasting are not as favorable for Europe as they are in Japan. “You already have terrestrial mobile TV (in Europe). The first steps are not very conclusive,” he said. “People don’t watch as much mobile TV as they do in Japan and South Korea, where they have a lot of time in transport. For Solaris, you have many channels that will be different country to country. That is a step they have to make in Europe, that they don’t have to make in markets like Japan. So, it is going to be more complicated here. There is a risk similar to what Toshiba (MBC’s main shareholder) saw in Japan.”
    But Europe does have some advantages in the market that provide a chance of success for a mobile satellite service. “Europe counts a number of advantages leading to the development of broadcast mobile services, including a regulatory framework determined to replicate for mobile broadcasting the global success achieved in GSM, a clear analog TV switch-off roadmap and the world’s highest cell phone penetration that push operators to seek new revenue sources,” said Beaudet. “We believe there will be increasing emphasis on cross-platform television services where satellites will be able to facilitate the expansion of terrestrial services outside of urban areas for operators introducing television services to mobile users.”