January 4, 2007

Cellphone Video Gets On the Beam

Cellular carriers and other technology companies have come up with numerous ways to deliver video and even live TV to cellphones over wireless networks in recent years. So far, the results have been a limited success.

Now, Samsung Electronics Co. says it has come up with a novel approach to provide video on the go: equip cellphones to pick up digital signals from local TV broadcasters. Cellphones using the technology would essentially become portable television sets that would get the same reception as TVs using antennas.

For the technology to work, broadcasters will need to transmit separate beams to portable devices equipped with a Samsung chipset, but this issue is being addressed, and it shouldn't be a major obstacle. The channel lineup could either be the same as local broadcasters are transmitting or special-tailored programming. Other devices, including laptop computers, in-vehicle TV sets and digital video players, would be able to receive signals when outfitted with the chipset.

Samsung faces a number of hurdles before it's able to sell the handsets, but at the Consumer Electronics Show in Las Vegas next week, the South Korean electronics giant plans to demonstrate prototypes it says will show its TV technology goes beyond the reach of other wireless-video approaches. For example, channel changes can be made practically instantaneously, and reception isn't affected when traveling even at speeds reaching 170 miles per hour, the company says.

With the new video approach, "Consumers can...take it with them on the train or in a car," says John Godfrey, a Samsung spokesman.

Wireless carriers and handset manufacturers have been racing to develop video technologies in hope of finding a new growth engine, now that markets for basic cellphone service are becoming saturated. So far, carriers have used upgraded wireless networks primarily to deliver videos and live TV programming. MobiTV, a privately held company, offers 35 live channels for Sprint Nextel Corp. and Cingular Wireless, for example.

Samsung's planned handsets would go a step further and receive TV both ways: over the wireless network and from local TV broadcasters.

The new technology, being developed by the company's Samsung Information Systems America subsidiary, also has advantages over existing delivery systems because it doesn't use up bandwidth on the wireless network, the company says. This avoids taking space from other data-heavy services such as Web browsing and social networking that carriers are hoping will provide new revenue streams.

Other companies also have recognized the benefits of this approach. Qualcomm Inc.'s MediaFlo USA is spending $800 million to build a nationwide broadcast network, using separate towers and radio-spectrum frequencies, that it plans to lease to wireless carriers for transmitting live TV. It already has its first customer: Verizon Wireless, which plans to launch a live-TV service on MediaFlo in the first half of this year.

Meantime, the Modeo unit of cellular-tower operator Crown Castle International Corp., is raising capital for another wireless-TV network that would use a different technology standard. Modeo, which is conducting trials in New York City, is looking for carrier partners.

So far, consumer response to wireless video has been lukewarm. Major U.S. cellular carriers provide a wide range of video content adapted from regular TV programs. Since these services run on the regular wireless networks, picture quality can be jumpy, and channel-switching time is much longer than it is on regular TV. Only 2.5% of U.S. cellphone users watch it at least once a month, according to research firm Yankee Group.

Local broadcasters, which would have to transmit new signals for Samsung's technology to work, have been receptive to the new system, attracted by the possibility of more advertising revenue from mobile-video customers in addition to traditional TV audiences, the company says. Sinclair Broadcasting Group, which operates 58 TV stations around the country, has begun trials with Samsung in Buffalo, N.Y., and Baltimore, as well as in Las Vegas, where the demonstration will take place next week.

Samsung is exploring a number of business models with local broadcasters. One idea is to offer an ad-supported service that would be free to anyone who buys a handset, laptop or other device with the chipset. Other possibilities: Offering TV service for a monthly fee or developing programming specifically for people on the go, with information about such things as local traffic or weather conditions.

Because the Samsung system, called Advanced-Vestigial Side-Band, uses TV broadcasters' existing infrastructures, including spectrum and transmitting towers, it doesn't require investment in separate networks or partnerships with carriers. A TV station needs only minor modifications to its transmitters and to add some additional equipment, which altogether costs tens of thousands of dollars, according to Del Parks, Sinclair's vice president of station operations.

One obstacle facing Samsung is getting approval for an international standard covering the new technology. That would mean any maker of electronic devices could design them to receive these new TV transmissions. Samsung is optimistic that the Advanced Television Systems Committee will approve a standard by mid-year.

If the standard is approved, Samsung will have to get approval from individual wireless carriers to build its chipset into their cellphones. The company says it likely will focus initially on laptop computers, in-vehicle television sets and portal video players.

Write to Li Yuan at li.yuan@xxxxxxx¹