If mobile Internet allowed people to have the world in their pockets, the next step up could be mobile TV - having the television in their pockets.
In a bid to further test the waters of mobile TV after launching 3G TV in 2005, Maxis has released a made-for-mobile drama series called Dimensions for free.

According to T Kugan, senior general manager and head of product development and infotainment services at Maxis, the co-production initiative between Maxis and Astro is not meant to generate revenue.

"I think the time is right. Today, if you look at the Maxis customer base, we have passed the 11.5 million mark with 5.2 million using mobile Internet. In terms of 3G, it is doing extremely well. We have the subscriber base, while Astro has the production background. We can tap into each other's strength. At this stage, it's not about making revenue. With just a 15 sen SMS (short message service) to activate the subscription, you can watch a full online series on your mobile," says Kugan.

Is this a sign of more things to come? After riding on growing revenue from non-voice services, Maxis definitely has more tricks up its sleeve. Non-voice revenue contributed 33% of its total revenue last year, up from 30.5% in 2008. Of this, 40% is derived from content based services with SMSes making the remaining 60%.

Kugan is confident that content- based services will continue growing yearly as top telcos in developed countries typically see the numbers closer to 50%. For instance, NTT Docomo from Japan registers 42% of its revenue from non-voice.

One of Maxis' hallmark services in the content space is a location based service called Friend Finder, which has around 3.2 million subscribers. The caller ringtone craze has also earned Maxis a steady stream of income. Kugan estimates that 60% of its content is developed locally. With telcos adopting a revenue-share business model and rarely making an outright purchase of the content they offer customers, the more they make from any content, the more the content developer makes too. However, a Maxis spokesperson declined to reveal the average revenue share arrangement it has with content developers.

Jury still out
As part of its marketing blitz, some of its applications and contents are featured in Dimensions, including Friend Finder. Kugan declined to reveal the cost of the production or the take-up of Dimensions but mentions that subscription is increasing by 20%-30% per episode.

Being a new field though, the jury is still out on the viability of mobile TV after seeing the lukewarm response to 3G TV. Looking at internal analysis and market reports, Kugan feels that mobile TV will take off when the capabilities are extended to broadcasting.

With 3G TV, the streaming is done on a one-to-one basis from server to client. But riding on the 3G network means competing for bandwidth with other services such as mobile Internet. As a consequence, quality can get compromised and services disrupted.

This will not be the case with a separate broadcasting network. In this scenario, the relationship is one to many, the same way normal television is transmitted and translates to a higher level of quality for the consumers.

"If you look at the services being consumed on technology such as broadcasting, the demand is for news and entertainment. And it's still very much early days. We've got over 100,000 users who have used mobile TV with  an average consumption of three minutes a day. The numbers are good but not great."

Maxis has completed trial runs on both Qualcomm's broadcast standard, MediaFlo, and the European standard of DVB-H (digital video broadcast over handheld). MediaFlo and DVB-H each use a different format to broadcast the services. At press time, Maxis had not decided on which standard to use.

Because mobile TV requires its own broadcasting network, Maxis is currently waiting on the Malaysian Communications and Multimedia Commission (MCMC) to release the spectrum for mobile TV.

Telco's interest in mobile TV is understandable as it is a lucrative revenue stream. According to Kugan, subscribers are willing to pay a premium for such services, with the average price being 20 euros (RM100) around the world. Facing heavy competition in the mobile content space, he believes that Maxis' differentiator is in its easy access and pricing plans.

"Consumers are willing to consume content and services provided they are in a very simplistic manner. If it is easy to download and easy to access, they will take it up."
Currently, what's hot in mobile content is social networking. Kugan notes that Malaysia has intense social networking communities. Any application that has a strong community-based portal will do well.

Services that struggle are those introduced before their time. "I would say mobile-commerce is still not there yet. Aside from Japan and South Korea, it's not picking up because the environment is very fragmented," says Kugan.

For telcos, getting their timing right in introducing what they feel will be a hot service consumers want to eat up is a frustrating experience. While M-commerce has been touted for many years, Maxis finally felt it was ripe for the market three years ago with one senior executive calling it "Store in your Pocket". But it has not panned out.

Whether mobile TV will reach its tipping point is still anybody's guess. But seeing how Malaysians can stay glued to their televisions, it could be a sign of another trend in the offing. Now, if only MCMC can get things moving faster.

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, Issue 789 Jan 18 - 24 2010