The Maduf Prophecies

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Incipit

 Prophecies, then and now  Structure of the business model

 Basic data  costs  revenue

 Results and conclusions

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Then (beginning 2006) ...

 Vodafone UK today revealed its surprise at the success of its mobile TV service and the level of consumer expenditure (Telecoms.com)‏

 Handy-TV sieht ungewisser Zukunft entgegen (Digital Fernsehen)‏  

Mobile TV Market in Korea to Reach 136.9 Billion KRW in 2006 (ROA Group)‏

 Growing demand for video will generate $501 million in revenue by 2010 (JupiterResearch)‏

 Mobile TV nightmare: Window of opportunity smaller than your phone screen (Rethink Research)‏

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... and now

 Mobile TV a potential $2bn market (BIA Financial Network)‏

Mobile TV to explode ... 462 million subscribers by 2012 (ABI Research)‏

 Mobile television failed to gain significant traction, with some services ramping down or shutting down entirely due to weak demand. (Deloitte)‏

 Mobile TV: Subscribers but no profits (Screen Digest)‏   Interest in Mobile TV continues to wane (Continental Research)‏  Sales of video phones to double by 2010 (Infonetics)‏

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The ecosystem

Content providers

Network(s)‏

Users

Aggregators

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Components of the model

 Market prognosis +  Growth prognosis +  Accountancy and taxation rules +  Company policies =  Result for investors

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Return for investors

Investors

Ecosystem

Initial capital

dividends

Residual value

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Overview

 Prophecies, then and now  Structure of the business model

 Basic data  costs  revenue

 Results and conclusions

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Networks  Covering Flanders + Brussels  16QAM (= Gent), 10 Mbit/s, ± 20 tv-programmes per mpx  QPSK, 5 Mbit/s or 7-10 tv-programmes per mpx  Twice five scenarios:

 Small cells only (780 16QAM / 325 QPSK)‏  Medium sized cells only (262 16QAM / 114 QPSK)‏  [Large cells only (49 16QAM / 22 QPSK)]  Existing large and medium-sized cells,

supplemented with small cells (619 16QAM / 173 QPSK)‏

 Existing large and medium-sized cells, supplemented with small and medium-sized (528 16QAM / 101 QPSK)‏

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Networks

 Two Monte-Carlo simulations (16QAM and QPSK)‏  Investments normally distributed  Opex and depreciations ~ capex  Economic lifetime ± 15 years  Opex include:

 power  sites rental  maintenance  NOC

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Costs

 Content/rights: uniform 30 % to 60 % (?) of arpu (ex VAT)‏  VAT 12 or 21% (?)‏  Marketing  Taxation (+ notional intrest, transferable losses)‏  New user registration  ESG, capex and opex  Conditional Access System  Billing and factoring  Help desk  Labour + overhead  Spectrum licence

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Demand from MICT Internet survey

Adoption classes: Early Adopters, Early Majority, Late adopters

Payment classes: Free To Air, subscription, PPV

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Demand from MICT Internet survey

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Price from demand curve

€/month

Number of users

Fixed costs

Max. income

Demand curve

Optimal price

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Growth speed: an example

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Growth speed: many examples... Platform p (/year) q (/year) ‏T-DMB (KR) 0,10672 1,47096 Vodafone 3G (DE) 0,09078 1,47192 Belgacom TV 0,02160 0,78840 Vodafone 3G (GB) 0,05652 2,13643 Vodafone 3G (IT) 0,04633 1,54400 TU-Media (KR) 0,25825 0,91588 Vodafone Live (GB) 0,05652 2,13643 Vodafone Live (DE) 0,09078 1,75336 Sirius Sat Radio 0,00171 1,44840 iPod 0,00160 1,42136 Digitenne 0,03782 0,50162 XM Radio 0,01473 1,14243 mp3 Belgium 0,01590 1,09583 TiVo 0,00100 1,32934 Vodafone Live (IT) 0,08168 0,69364 Proximus gsm 0,00102 1,19226 GSM Belgium 0,00192 0,93656 .....

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Modeling speed of growth q

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Uncertainties

 Model has no proven track record  Internet survey (representative?)‏  

Model based on existing tv content, not specialized mobile content

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Results and conclusions

 Success depends on many factors  Return € 6...60 million if success...  ... but failure not impossible.

 Government strategies as yet unclear  Strategic motives may be more important: image, quad

play, customer retention, squeezing out competition...  Market can evolve positively, killer applications can

emerge