BT closes lid on mobile TV service

BT is to abandon its fledgling mobile broadcast TV service less than a year after it was launched.

On Thursday, Virgin Mobile, the only customer for BT Movio, announced it was to stop broadcasting the service at the start of next year. It had released only one handset -- the HTC-manufactured Lobster phone -- which supported the technology, and sales of that device were poor. BT was quick to confirm that it was abandoning the project, launched in September 2006, in its entirety.

"BT can confirm that following a review of its wholesale solutions, the decision has been made not to continue with the Movio service," a statement from the company said on Thursday. "BT is discussing the timescale for the closure of the service with Virgin Mobile. While the feedback from users on the service has been complimentary, Movio sales have been slower than originally expected mainly due to a lack of compatible devices from the big brands. This in turn has been caused by the fragmented nature of the mobile TV market and hesitancy on the part of the main network operators as they seek to fill their own largely under-utilised 3G networks."

The Lobster phone was seen by critics as an unattractive handset and, being based on Windows Mobile, it was not ideally suited to the consumer sector.

The final straw for BT, however, was the recent backing given by the European Commission to the mobile broadcast technology Digital Video Broadcasting -- Handheld (DVB-H). BT Movio was based on the rival Digital Audio Broadcasting -- IP (DAB-IP) standard, which reused digital radio spectrum to deliver a handful of TV channels and a range of digital radio stations.

DVB-H promises more channels, but spectrum availability for that technology had looked uncertain until it became apparent last week that the European Commission would force member states to adopt the standard.

According to research by analyst firm Datamonitor, Europe will have 42.7 million mobile broadcast TV subscribers by 2012.

Not all analysts are convinced of the technology's potential, though. "There's no mass-market demand, no obvious business model and lots of better things to do with the spectrum," blogged Disruptive Analysis analyst Dean Bubley last week. "Sure, there are probably a few specific niches for mobile TV to be successful, but the idea that tens or hundreds of millions of people in Europe are going to be subscribing to them and watching avidly is pure fantasy."