Microsoft joins BT-Virgin mobile TV team

Microsoft will soon announce a partnership with British Telecom and Virgin Mobile to launch a mobile TV service in the UK, a source close to Microsoft confirmed.

For the past several months BT has been building a network to broadcast digital TV over mobile phone networks. BT said in January that it plans to offer the network, called BT Movio, to mobile carriers that want to offer TV service to their customers.

The first mobile operator to use the BT network to deliver TV service is Virgin Mobile. The two companies conducted a trial last year for four months with roughly 1,000 users in London. Virgin Mobile plans to launch the service sometime this summer. Users can expect to get at least five TV stations as part of the initial roll-out, along with a number of radio channels.

While BT and Virgin's plans have already been disclosed, an announcement scheduled for Tuesday at the 3GSM World Conference in Barcelona will be the first time Microsoft's affiliation with the service has been made public. Microsoft has been working for months with BT and Virgin Wireless to provide necessary software for packaging and viewing the TV content shown on mobile phones.

Microsoft also provides software to Verizon Wireless, which has been offering its Vcast TV service in the US since early 2005.

Microsoft's involvement with the BT Movio service is important because it's yet another validation of the entire mobile TV market, say some analysts.

"There's been some question about whether or not the mobile TV market would be big or not," said Iain Gillott, president of iGR, a market research firm specialising in mobile and wireless networks. "But the involvement of Microsoft legitimises the market in a way."

There's been a lot of talk and hype surrounding mobile TV over the past year. So far, mobile-TV services have not been a big hit with consumers. But mobile operators are looking at mobile TV as a big money maker for the future as prices for voice minutes continue to drop. They hope that people will turn on their phones and pay a premium to watch news and sport clips and mini soap operas.

In the US, Verizon Wireless, Cingular Wireless and Sprint Nextel are already offering mobile TV service. But most experts agree that current 3G technology won't be sufficient to handle large volumes of live TV viewing. As a result, several companies, including BT, are developing separate networks that can handle video traffic.

While BT uses DAB technology, others, such as Qualcomm's division MediaFlo and Crown Castle's subsidiary Modeo, use different technology. Modeo uses a technology called DVB-H (Digital Video Broadcasting-Handhelds), which is very similar to DAB. MediaFlo is developing a homegrown technology it calls Flo. Verizon has already indicated that it plans to work with MediaFlo once its network is finished later this year.

Handset makers are also preparing for the mobile TV market. In January, Motorola, Nokia, and Intel formed an alliance to support DVB-H technology. Samsung and MediaFlo demonstrated the Flo technology at the Consumer Electronics Show last month.

In the end, it will be consumers who ultimately decide if watching TV on a tiny screen is worth it.