The investment of $40 million this week by EchoStar, through its Asian subsidiary, in the earliest mobile TV system in the world, the S-DMB service in Korea opens up a whole new raft of potential for mobile TV involvement from the number two US satellite TV operator.
EchoStar Asia Holdings put the money into TU Media, to become the second largest shareholder after SK Telecom. TU Media is also partly owned by Samsung and Toshiba, and has a satellite footprint that covers Korea and Japan, although the service has not yet been launched in Japan.
S-DMB uses OFDM modulation, and operates in the 2.6 GHz spectrum and needs local terrestrial repeaters for mobile handsets to be able to receive signals when in-building.
It may be a big stretch of the imagination to see where EchoStar CEO Charles Ergen is going with this one. We’re not quite sure how a satellite operator that uses line of sight 12.2 to 12.7 GHz spectrum can suddenly find itself holding 2.6 GHz spectrum, so perhaps this is not about partnering up to offer mobile TV in the US. On the other hand the suddenly emergence of MediaFLO into the limelight in the US as a shut out against mobile TV by other technologies would certainly attract Ergen. Who better to pioneer a second satellite based architecture for TV than one of the two US pioneers already in that business?
Ostensibly the rationale was about accelerating the adoption of mobile video, offering technology know how and taking the offering worldwide. So that endorses the idea that somehow EchoStar might uses its own satellite fleet to build out S-DMB style services in the US, because it has no significant advantage outside the US.
Shin Cho, Senior Vice President of SK Telecom said, “We look forward to working closely with EchoStar as a strategic partner, whose more than 13 million subscribers demonstrate a firm commitment on behalf of the company to provide consumers with the best value and choice in programming.”
In order to make TU Media a renewed success against the now dominant T-DMB, which is mandated by the Korean government as ‘free to air,’ what the system needs more than anything else is content and perhaps that’s what EchoStar can bring, although at this point it appears not to have access to any of its own content and has a history of uneasy friction with many of the major US content providers. The major Korean broadcasters are behind the free to air T-DMB service and have given it access to the best Korean content, stopping S-DMB customer acquisition in its tracks.
At present S-DMB services have been in operation in Korea for 18 months and have mustered some 1 million customers offering 15 video channels and 19 audio channels and charging about $17 a month for the service.
But EchoStar is not one to take on investments just for the sake of it, and sometime in the net few months it will make clear how its strategy for mobile TV will play out.