Finnish mobile TV markets, Policy & Regulations of Broadcast in the Digital Convergence Era in Finland
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1 Finnish mobile TV markets, Policy & Regulations of Broadcast in the Digital Convergence Era in Finland Mobile TV & Broadcast Transmission International Conference Taipei 2006 Juha Lipiainen Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
2 List of Content Country facts Mobile TV Opportunity Basic principles driving Finnish market forward Regulatory framework Regulator bodies and their mandate Legislation framework Licensing mechanisms for needed for Mobile TV business Mobile TV Business Model in Finland Implementation plan Summary Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
3 Finland in Nutshell Population & economics: 5.2 million (2006) male 49%, female 51% 76% living in South and West 0-14 years: 17.3% years: 66.7% 65 years and over: 16% GDP 157 Billion Eur (2005) GDP per capita eur (2005) Geography: Capital Helsinki ( inhabitants) km2 of which 74% forest and swamps, 10% lakes, rivers, 12% cultivated and built up land Length 1140 km, width ca. 500km Member of EU since Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
4 TV & Telecom in Nutshell Cultural specifics Very homogeneous country and population Traditionally only few channels TV distribution ~ 50 % via cable ~50 % via antenna. Digital home phenomena = broadband access, digital TV, internet and mobility is changing consumer patterns in a fast way Mobile phone penetration 103% (2005) TV Broadcasters and Mobile Operators: Public Broadcaster YLE Analog: two nationwide commercial Broadcasters: MTV3, Channel Four Switch-off analog to digital Take-off of digital terrestrial TV has brought new paytv channels & subscribers to market (2001 onwards) Mobile Operators: three nationwide mobile operators, Elisa, TeliaSonera, DNA DVB-H Network population coverage is 29% in Dec 2006 (Hki, Tku, Oulu) 40% coverage by Dec Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
5 Mobile TV Opportunity: Assumed Consumer Acceptance Consumer acceptance for mobile broadcasting has been clarified 5-10 per month for services 50 premium for device 3-7% penetration within first year Market size scenarios for Finland Note: Due to limitations of the research set-up the scenarios may be highly inaccurate and should be treated only as a indication of potential market size Innovation Adoption Curve Framework Adoption phase Target population: Finnish population aged years: 3,350,000 Estimated mobile phone penetration: 85% 41% Assumptions Scenario A (-) Scenario B (0) Scenario C (+) Innovators 1 15% Early adopters 14 Early majority 26 Late majority 47 Laggards / Rejecters Share of early adopters Buys a new handset within a year Intention to buy at 4,90 for early adopters Market size (12 months) 14% (12%) (pioneer + early adopters in national sample) 62% (7%) (early adopters that planned to buy a new phone within a year) 34% (3%) (early adopters def would buy) 3% ( ) 14% (12%) (pioneer + early adopters in national sample) 62% (7%) (early adopters that planned to buy a new phone within a year) 48% (4%) (early adopters in nationals sample/ definite buyers for concept) 4% ( ) 15% (13%) (pioneer + early adopters) 62% (8%) (early adopters that planned to buy a new phone within a year) 84% (7%) (early adopters definitely/ probably would buy) 7% ( ) Would buy it as soon as it is available I would buy it at the same time of acquiring a next new mobile I would buy it when its usage has become more common I might acquire the service at some point in future I will never acquire the service Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila N=466
6 Ready for Commercial Launches Tested and standardised solution Market players committed Receivers available for pilots Market Entry 2006 Regulation accord. to national media laws Broadcast spectrum approach (UHF) Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
7 Horizontal Business Model Horizontal business model separates content, service and network layers Existing fixed or mobile communication channels offer the needed alternative return channels for broadcast services The same or adapted content can be utilized via several distribution channels. Content Content Content Service Provision Service Provision Service Provision Broadcast Network Broadband Network Mobile Network TV, Radio PC, Telephone Mobile Terminal Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
8 Licensing Model Horizontal Approach Multimedia Content TV & Radio files Service Provider DVB-H Network 2G/3G Network Broadcast channel Return channel 1 DVB-T/H Program 2 DVB-T/H network 3 License License (Authorized player) (= Frequency) Services based on Business Model Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
9 Regulatory Framework Regulator bodies and their mandate Legislation framework Proposed Regulator Framework Example of how regulations works Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
10 Regulatory bodies and their mandates Regulatory Bodies: Driving principles: Openness: Technology neutrality Promotion of service innovations Consumer perspective: Affordability and quality Competitive marketplace Finnish Parliament Legislation Finnish Government: Grants program licenses (program & networks DVB-T/H) Ministry of Transport & Communication Prepares government decisions Prepares legislation Finnish Communication Regulatory Authority (FICORA) Supervision of market performance and operation Consumer Ombudsman Advertisement content Service obligation fulfillments Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
11 Mobile TV Legislation framework Constitution Freedom of speech Act on the Exercise of Freedom of Expression in mass media Duties of publishers and broadcasters Act on Television & Radio Operations (744/1998) Content regulation Program licenses Implements EU TV Directive Communications Market Act (393/2003) Network licenses Implements EU Telecom Directives Right & Obligations for Network & Service operators (significant market power, technical requirements) Mandates FICORA to act Radio Act (1015/2001) Frequencies Telecommunication terminal equipment regulation (CE) EU TV Directive & Tele communication Directives: Under the renewal process Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
12 The Finnish Communications Regulatory Authority (FICORA) The Finnish Communications Regulatory Authority (FICORA) is a general administrative authority for issues concerning electronic communications and information society services. Its mission is to promote development of the information society in Finland. The specific duty of the Authority is to safeguard the functionality and efficiency of the communications markets in order to ensure that consumers have access to competitive and technically advanced communications services that are both of good quality and affordable Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
13 Main tasks of FICORA FICORA issues technical regulations and coordinates standardisation work at national level. It also supervises the technical functioning and security of communications networks, coordinates numbering in telecommunications networks and allocates number blocks and codes for operators Supervision of the communications markets is also intended to ensure healthy competition and compliance by operators with the statutory obligations relating to pricing and operation. Effective competition also affords the consumers greater choice. FICORA controls the use of radio frequencies in Finland with the aim of ensuring there are sufficient frequencies equally available to all who need them. It seeks to assign frequencies that are as free from interference as possible to meet each user s needs. It also ensures that Finland s national interests are taken into account in international agreements on frequency usage. FICORA also has duties concerning protection of privacy and data security in electronic communications Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
14 Key points of proposed Implementation practice Operator of DVB-H Network The license to operate the network has been granted to Digita Oy, the operator of the terrestrial transmission network in Finland The amendments of the Act on Television and Radio Operations regarding the granting of license to transmit radio and television programmers on the 4 th mux (DVB-H) has not yet been submitted to the Finnish parliament. (The proposed amendments are changing the licensing procedures compared with those regarding to broadcasting licenses on terrestrial networks. Because one DVB-H multiplex can transmit between television programmers, the process of granting program licenses in proposed to be simplified The applicant has to secure availability of capacity on the DVB-H mux The application is to be addressed to Finnish Communication Regulatory Authority The authority can not make a qualified judgment of application and reject it if the application is not breaking existing laws. The applications are dealt with on a first come, first served basis. Licenses to be given for 10 years Holders of license to transmit on terrestrial digital networks (DVB T) have automatically a right to simulcast on DVB H Other than broadcasting services could be offered over DVB H network without license The transmission capacity to be contracted either from operators (Digita) or through aggregator Operator of the network can not hand over more that one third of the capacity to anyone Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
15 Example of how regulations works Content Provider Capacity or program License for TV like services DVB-H Network National free-toair channels as simulcast: normal broadcasting no additional fees Foreign channels: retransmission fees payable New channels: payments as usual Content owners Service Provider DVB-H treated as subcategory of existing DVB-T broadcasting rights Content Aggregators Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila Mobile frequency License (= Frequency) 2G/3G Network Cellular network License (= Frequency) Broadcasters and Telecom operators Ministry of Communications Household licence required for receipt of Mobile TV broadcasts Consumers
16 Implementation Environment Current Digital TV status 3 operational DVB-T multiplexes. 94% population coverage 2005, 1.13 million DVB-T digital households =51% of all TV households (Oct06) Analogue switch-off: August DVB-H Opportunity Regional 4 th mux to start with RRC-06 results: 3 Fixed UHF Multiplexes 2 Portable UHF Multiplexes 2 Mobile UHF Multiplexes 2 Mobile VHF Multiplexes Regulators NW License Beauty Contest Nov. 14 th, 2005 Jan 31 st, 2006 (4 applicants) NW license granted to Digita on March 23, Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
17 MobileTV Business Model Payments Data flow Service flow Pay TV Services + Supportive services FTA + Pay TV services SI Domestic channels and aggregation Network & Service Operator Role Fixed service operation fee keys services Service information How the initial model works: 1. Broadcast Network operator Digita builds the first network buying equipments from providers like Nokia, providing broadcasting capacity to broadcasters and mobile operators 2. Broadcasters simulcast and create new mobile channels and rent the capacity from Digita (max 1/3) Customer data on group level Foreign channels and aggregation Revenue sharing Access Provider, channel aggregator & Reseller Role Customer data on group level Fixed service operation fee Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila Revenue sharing Interactions, Right objects 1) Network Access fee 2) Service fee 3. Mobile operators retail the services for their own customers and build revenue sharing models with all broadcasters At the same time mobile operators buy capacity (max 1/3), aggregate foreign channels to differentiate portfolio from competition and build similar revenue sharing models 4. Consumers buy devices from providers like Nokia, and subscribe to TV service package from mobile operators
18 Summary Regulatory Framework in place for Mobile TV business Business model between main actors agreed Mobile TV Business will be launched in Finland by end of Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
19 Thank You. Questions? Nokia Tutorial on Mobile TV / October 30, 2006 / Toni Paila
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