The next big things - mobile TV and porn

The booths for "adult content" businesses at Spain's 3GSM World Congress were tucked away in one corner of the sprawling expo.

Aside from the oversized posters of bikinied women in this particular corner, it was an unassuming section of the annual cellphone trade show.

And just like everywhere else on the expo floor, company execs in pornography row spent a busy four days last week touting their mobile services to the throngs of passers-by.

Niklas Nordquist of phone porn producer Lechill offered the Herald a breast-laden pamphlet and a glimpse of saucy images on his 3G phone.

Porn pictures and video clips make up a significant percentage of the content Europeans download onto their phones, Nordquist said.

"It's a door opener. A lot of people are curious. If it's a choice between CNN and adult content, people will probably choose adult content."

Still on the expo floor but just outside 3GSM's red light district, Thomas Jensen of End2End said that although porn was a growing market with a "double figures" percentage share, he disputed Nordquist's claim that titillating images were encouraging phone users to try mobile content.

End2End is a content "aggregator" - it gathers video clips, pictures, ringtones and games and sells them in packages to mobile network operators. The company's customers include Vodafone New Zealand, whose gaming platform it services out of its Copenhagen data centre.

Jensen said having a comprehensive content offering was now vital for mobile operators as a means of differentiating themselves from competitors and increasing income or average revenue per customer (ARPU).

"ARPU in general is declining but ARPU on data services and content is on the rise," he said.

One of the heavy-hitting network executives scoping the latest mobile market developments at 3GSM was Kris Rinne, chief technology officer at Cingular Wireless.

Rinne said US network giant Cingular's revenue from data services had doubled in the past year as customers picked up more email over their phones and downloaded more content.

Ringtones and games remain downloading favourites. Applications to use email and instant messaging via the phone are increasingly popular. Cingular plans to launch music downloads and a video service this year.

The company has signed an exclusive deal with HBO to provide TV show content designed specifically for viewing over the mobile phone screen.

"This isn't going to be your primary way of viewing [TV shows], but I sure would have watched a 15-minute clip this morning on what happened in the Olympics yesterday," Rinne said.

One estimate is that the global market for mobile entertainment will be worth US$42 billion ($62 billion) a year by 2010.

In New Zealand, Telecom and Vodafone have leaped onto the content bandwagon, touting the music and video download capabilities of their 3G networks.

Leif Eliasson, Ericsson's global services head of content and application sales, used 3GSM to plug the message that while no one leaves home without their cellphone, only 30 per cent of young consumers take their MP3 player out with them.

This presented network operators with the chance to claim the music download business as their own, Eliasson said.

Ericsson has done a deal with music heavyweight Napster, allowing consumers to download music direct to their phone while they are out, and at the same time receive a copy of the file on their PC. The service is not yet available in New Zealand.

The biggest doses of hype and enthusiasm being dished out to the 50,000 attendees at 3GSM in Barcelona this year were around the growth and potential of mobile TV.

Gunnar Garfors, director of mobile services at the Norwegian Broadcasting Corporation, said a survey by the state broadcaster had found 8 per cent of young people preferred to watch TV on their mobile rather than in the home.

Thirty per cent said they preferred mobile TV over MP3 music.

Ericsson chief executive Carl-Henric Svanberg said during the conference he expected most 3G networks around the would upgrade to the faster HSDPA technology over the next year, opening the way for more broadband-based services like mobile TV.

While the industry had over-hyped the potential of 3G early on, the technology now had the potential to deliver to phone users, he said.

Also speaking at 3GSM, Nokia chief Jorma Ollila cited the findings of a mobile TV trial by British network O2 that 76 per cent of those involved said they would pay for the service when it launched.

Closer to home, Ericsson's Australian and New Zealand managing director, Barry Borzillo, said consumers' appetite for receiving content on their phones was increasing.

Australia's 3 mobile network appeared to be generating strong interest for its TV service, particularly streaming live cricket coverage, cartoons and music videos.

Ericsson runs a content aggregation service called IPX (internet payment exchange) which is used by Optus in Australia.

Borzillo told the Herald he expected customers' willingness to pay for content to increase as its scope improved and providers offered more "location-based services" such as directions to restaurants specific to the area where the phone user happened to be at the time.

"From a content perspective I think it's just a question of when, not if. Look at what's happening on the fixed [phone/PC] side and where you see that content today," he said.

"The same applies to the mobile side. As the speed you provide increases, the richness of services you provide also increases. Once you improve the service I think you'll see much more content on the mobility side."

Ericsson's New Zealand country manager, Brian Phillips, said the company would bring its IPX service to this country "if we get sufficient interest".

Microsoft used 3GSM to assert its enthusiasm for mobile technology, the potential for mobile TV and the power of converging personal and business communication tools on to a single handset.

High-energy chief executive Steve Ballmer made his first ever appearance at 3GSM this year, pacing the stage as he delivered a keynote speech primarily promoting Microsoft's vision of embracing mobility.

Microsoft's strategy is to use its range of software and technology partnership deals to go after the Blackberry enthusiast: the mobile emailer who wants to know which of his friends and colleagues are "online" at any given time.

Another great corporate cheerleader, Virgin founder Sir Richard Branson, didn't even need to be at 3GSM to ooze enthusiasm for the dawning of the era of mobile TV.

Branson joined Ballmer's presentation via a pre-recorded video message to acknowledge Movio, his company's mobile TV partnership with Microsoft and British network BT.

"Being able to watch your favourite programmes on your mobile while on the go will soon be as natural as watching TV in your living room today," Branson beamed.

Now let's see if the consumers switch on.

* Simon Hendery travelled to the 3GSM World Congress as a guest of Ericsson.