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Continued ...

The reason this may work well for Sky is that it has virtually saturated he UK with almost 9m households out of 24m taking its paid satellite TV service. Its quarterly additions have shrunk and shrunk and it has now had to embark on bundling with broadband and VoIP services to continue to deliver growth. The next step might be to take on an MVNO and it has a close relationship with Vodafone and could offer a device of its own, complete with a Sky TV subscription on the handset. Such a move would give it a huge value add, and a full quadruple play - and we should never be surprised at the audacity of a News Corp-owned company, especially in a territory where it is threatened by breakthroughs like Freesat (the new free satellite TV service in the UK which threatens to have 200 TV channels by Christmas).

There are many other scenarios possible, and even a major breakthrough in the UK for MediaFLO would not necessarily see it flourish elsewhere in Europe. There would certainly be no TV roaming, since this spectrum just is not available in the type of size elsewhere, which would mean that to repeat the strategy at Sky Italia or at its other properties in South America and Asia Pacific, the entire service might have to be thought out again from scratch.

Just what EU telecoms commissioner Viviane Reding will make of a technology which is a direct rival to Europe's recommended standard, DVB-H, being deployed in the UK, is anybody's business. But the key to this is will she or can she legislate against it? We don't think so. There is a trend towards technology neutral spectrum allocation and Ofcom would have to repay the auction price if this spectrum were not genuinely neutral. But then again, if making DVB-H a preferred standard fails at the first challenge, then it bodes badly for the rest of Europe in mobile TV. In the end, it will be commercial interests which Qualcomm manages to leverage, both among broadcasters like Sky, and among cellular operators, that will decide whether this spectrum is played around with a little and then sold off, or becomes a springboard for broadcasting and an element in a whole new formula for quad play for satellite TV suppliers.

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