04 April, 2008

Mobile Tv -Another Reason To Buy Safaricom Shares!

Mobile phones have revolutionised the flow of information in Africa.The service providers have raked in millions of dollars due to the mobile industry and the services mobile phone tend to open up.The profits are set to rise tremendously with the advent of Mobile Tv which will essentially mean a wider advertisement market which can be appropriately be dubbed"adverts on the go".I foreseably see Safaricom being among the first companies to venture into this avenue in Kenya and that means profits.

Mobile Tv involves merging mobile phone services with television content over cellular networks.Unlike traditional television sets, mobile phones offer unmatchable advantages such as:
  • Ease in mobility

  • Selectivity of content(i.e. video on demand)

  • Interactive TV

  • Internet facilities

Hence of necessity the mobile service provider that will bid and buy the license to provide mobile content will increase its profit and viability.Mobile Tv content currently can be supplied through a number of formats including a two-way cellular network and the second is through a one-way dedicated broadcast network. These include digital video broadcasting-handheld (DVB-H), digital multimedia broadcasting (DMB), TDtv (based on TD-CDMA technology from [IPWireless]), 1seg (based on Japan's ISDB-T), DAB and MediaFLO. (courtesy of wikipedia inc)The Eu recently endorsed the DVB-H(Digital Video Broadcasting for Handhelds) as its uniform platform among the member states so as to achieve consistency and interconectivity among the member states.The DVB-H standard has also been adopted by South Africa with Multi Choice the providers of DSTV taking the lead in establishing the service(see here for the press release)Nigeria has similarly followed suit link here .It is expected that there will be over 500 million mobile tv customers worldwide by 2011.At the moment South Korea is the most advanced mobile tv market with over 10% of its population using TV enabled mobile phones. In Britain mobile tv service is provided by the Virgin Group subsidiary company Virgin Mobile among other players in the industry.

The traditional TV providers such as Kenya Broadcasting Corporation(KBC), Kenya Television Network(KTN) and Nation Television(NTV) should brace themselves for the competition that will arise due to this facility that can be supported by CDMA enabled, 3G and 4G mobile phones.DSTV Africa have actually taken the lead in launching the service hence the competition is iminent. In contemplation of digital advances the Nation Media group recently established an ITC department to specifically deal with such challenges.

On the international front the license costs quite some amount for example the San Diego based Qualcomm Inc the largest maker of chips that power cell phones recently purchased a radio spectrum(6 megahertz) network at 554.6 million .It is expected that the license to operate and provide mobile TV content in Kenya will be priced differently and at a higher rate from the usual TV and Radio broadcasting rights.Whatever the case the service should be amply priced so as to benefit the ordinary mwananchi.The fact that the internet will soon take over fromTelevision advertisements as the biggest advertising medium in Britain according to a report by Internet Advetising Bureau(IAB),Pricewaterhouse and Coopers and the World Advertising Centre further propounds the potential of internet enabled mobile phones as the next big thing in the advertisement industry.

In the local scene with new products such as M-Pesa(mobile banking) and prospects of mobile tv coming up one has all the more reasons to own shares in Safaricom.

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