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February 12, 2007

Cingular to Launch Mobile TV - Bad News for MobiTV

posted by MR WAVETHEORY at 2/12/2007 09:44:00 AM
A while back, I wrote about how there was a feeding frenzy over the MobiTV deal where several VC firms and strategics put in a $100 million into the mobile TV company. Investors included Oak Investment Partners, Adobe Systems, and Hearst. MobiTV was the first mover in providing mobile television, i.e television on your mobile phone. It had a great business, reportedly had over 1 million subscribers on Sprint, Cingular, Verizon combined, and was profitable. So, everything was looking pretty good, until Qualcomm announced that it would be providing mobile TV services via MediaFlo to Cingular and Verizon and possibly Sprint as well.

MediaFlo is a bet your company type of investment that Paul Jacobs, son of Qualcomm founder, Irwin Jacobs, made. It looks like it is paying off big time.

Qualcomm Inc.’s MediaFLO USA Inc. mobile TV business racked up another major customer win as AT&T Inc.’s Cingular Wireless L.L.C., the nation’s largest wireless carrier, announced it expects to introduce commercial mobile TV services in “late 2007” using the MediaFLO network. Details of the deal, including specifics on financial terms and the service itself, were not disclosed.

"MediaFLO USA's service will add another dimension to our robust offering by delivering a TV-quality mobile media experience that perfectly complements our existing voice and multimedia services," said Marc Lefar, chief marketing officer for AT&T's wireless unit. "We look forward to bringing our subscribers a compelling, differentiated service and the innovative devices for which AT&T is known."

The money in mobile TV is huge so it looks like a great win for Qualcomm, but it also looks very bad for MobiTV unless they are also part of the deal. I had raised this issue earlier in my blog post about MobiTV. It really puts the company's business model into question unless they can ramp up things like the AT&T broadband TV offering.

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