New Life for the Old UHF Band
By Om Malik

(Business 2.0) – If you thought UHF had gone the way of eight tracks and Betamax, think again: The broadcast spectrum could be the future of television. This summer, cell-phone giant Nokia and chipmaker Qualcomm are launching multimillion-dollar trials aimed at bringing TV to cell phones over UHF—home to channels 14 through 83 in the rabbit-ears days before cable. (While cell phones currently transmit signals over ultrahigh frequency, they use a different slice of the spectrum than UHF TV.) UHF systems could deliver to your handset 10 to 100 channels of interactive television, everything from sports highlights to episodes of Oprah. "Phones will be the best interactive TV environment around," claims Jeff Lorbeck, senior vice president and general manager of Qualcomm's UHF-focused MediaFlo business unit.

While Qualcomm and Nokia will win big by building the infrastructure, TV-on-phones technology will create a passel of opportunities for entrepreneurs too. Some channels will broadcast standard TV, but thumb-jockeys will also enjoy interactive programs that blend television with the Web. And because small screens could abbreviate viewers' attention spans, content providers will be seeking tailor-made shorts featuring weather, traffic, and news, as well as data applications to feed updates to phones.

The UHF shift comes five years after the industry poured billions into third-generation networks, assuming that near-broadband speeds would support streaming video. But now that 3G is being used mainly for wireless Internet and voice, carriers fear that adding video will lead to slow delivery and dropped calls. UHF, however, could deliver TV more cheaply than 3G without clogging the data pipes.

Qualcomm's and Nokia's competing UHF technologies will work in similar ways: Signals are broadcast from TV towers and processed by specialized phone chips. Qualcomm is spending as much as $800 million on a new network, called MediaFlo, which will interact with a proprietary system of chips and servers. The San Diego giant has acquired UHF spectrum in most major U.S. cities and expects to launch trials later this summer, rolling out nationwide service next year.

Nokia, meanwhile, is looking to sell handsets and gear based on a competing technology called DVB-H (digital video broadcasting for handhelds). To build a test network, the Finnish company is teaming up with cell-phone-tower operator Crown Castle USA. Trials are under way in Pittsburgh, though widespread deployment isn't expected until early 2007. Meanwhile, Texas Instruments is working on a mobile-TV chip called Hollywood for Nokia and others.

By 2010 the U.S. market for mobile-video services could hit $30 billion, according to A.T. Kearney. Wireless subscribers in South Korea and Japan already get UHF TV on their phones, and experts put the value of such offerings at about $20 per customer per month. But while 47 percent of Americans surveyed by Jupiter Research say they'd watch free video on their phones, only 19 percent are willing to pay for the privilege. That doesn't bother Lorbeck, who notes that other phone features, such as cameras, took off in Asia before catching on in North America. Plus, early adoption of 3G video offerings—such as Verizon's V Cast and Idetic's MobiTV—bodes well for UHF. In-Stat estimates that there are more than 275,000 mobile-video subscribers in the United States and predicts that shipments of UHF and 3G TV-enabled phones will hit 80 million by 2010. Rabbit ears not included—or required. — OM MALIK