Latest statistics show that China Unicom Shanghai currently has 20,000 mobile TV subscribers. However, China Mobile’s mobile TV subscribers exceeded 150,000 last year, and in Shanghai alone, the number was over 20,000.

CCW Research, a leading IT consulting firm in China, estimates the mobile TV market at 16.7 million yuan in 2005, up 153 percent over the previous year. In 2006, as the 3G technology is put into commercial application, this industry is poised to expand. The 2008 Beijing Olympics will give added impetus to this industry, which is predicted to have a 150 million-yuan market by that year.

Research conducted by Norson Telecom Consulting indicates China’s mobile TV industry will rise to become a 1.3 billion-yuan business with 52.2 million subscribers nationwide by 2008.

Too many hurdles

Yet despite these huge numbers and the activity in the service side, the domestic mobile TV industry has remained static. In China, mobile TV is identified as a media source and thus falls under the censorship regulations of SARFT, who has introduced a strict licensing policy over the industry. Without the SARFT license, operators are only permitted to conduct preliminary testing or trial services on a small scale.

To date, SARFT has only granted a license to one organization, namely the Shanghai Media Group (SMG). China’s second largest media group, SMG comprises TV and radio broadcasting facilities.

Once licensed, SMG cooperated with China Mobile Shanghai, adopting the “broadcast model” of mobile TV service where the former provides TV programs via satellite TV using the latter’s telecom network. As a result, the cost is relatively low, with clients enjoying unlimited TV programs for a fee of 30 yuan a month.

Telecom companies say that they should have the right to operate the whole system, because mobile TV, as they see it, is an additional feature of telecommunications. However, to date the government has not been responsive to this request. The companies therefore began to explore independent avenues, coming up with the “telecom model,” which allows them to transmit their independently produced programs on their own network, which is, of course, far more costly. At present, China Unicom charges 12 yuan for one minute of data flow. It therefore takes 720 yuan to watch cell phone TV for just one hour, a luxury that ordinary consumers will definitely find unacceptable. High fees would therefore seriously hinder mobile TV from gaining wide popularity in China.

In early March, some media reported that Shanghai Oriental Pearl, a subsidiary of the SMG, is expected to launch DMB mobile TV in the first half of this year as one of its core projects. A mobile TV network covering the whole of Shanghai will be completed in just two to three months.

Yet despite opening network services, Chinese top mobile phone makers, in contrast to their aggressive foreign peers, have taken a prudent attitude toward mobile TV. While foreign brands such as Nokia, Motorola, Sony Ericsson and Samsung have unveiled their TV-equipped cell phones, Chinese top phone makers have yet to come up with these products and seem reluctant to do so.

According to Liu Fengxi, Deputy General Manager of Konka’s communications division, Konka has no plan to produce TV-equipped cell phones at the moment, citing market immaturity and licensing issues as their reason.

Su Lijun, Director of TCL’s Marketing Department, said TCL is currently not making TV cell phones, because of the licensing issues and varied technical standards.