Qualcomm Setback in Europe

Qualcomm Inc.'s efforts to sell its mobile TV technology in Europe suffered a blow on Wednesday with the European Commission's indication that it will potentially forbid the use of the U.S. company's system.

The Commission said that it favors the use of a single mobile TV standard across Europe and that if necessary will mandate one. If it does decide to choose a single technology, the Commission will likely pick DVB-H (Digital Video Broadcasting-Handheld), a standard that competes with Qualcomm mobile TV technology MediaFlo, it said.

"Currently in Europe, there is a risk of market fragmentation as there are several mobile TV technologies for different platforms," the Commission wrote in an FAQ about the report. DVB-H is the strongest contender for mobile TV, the Commission said, with about 40 worldwide pilots of the technology completed or in process.

"The Commission therefore considers that DVB-H will form the basis for successful introduction and take-up of terrestrial mobile TV services in the E.U. It will continue to monitor the situation in the E.U. and may come forward with proposals in 2008 including, if appropriate, making this open standard mandatory," the Commission said.

The Flo Forum, a group that supports Qualcomm's technology, criticized the decision, arguing that choosing only one permissible technology will stall the advancement of a healthy European mobile TV industry.

The forum also said that a mandate for mobile TV technologies can't be compared to a similar mandate that was issued in the cellular market. The GSM (Global System for Mobile Communications) mandate happened after GSM was already being used and commercially successful, the group said.

In Europe, mobile operators were required to use the GSM standard, rather than choose between it and Qualcomm's CDMA (Code Division Multiple Access) technology. The European mobile industry often cites that decision as the reason that the cellular market there is more advanced than markets like the U.S., where, they say, multiple incompatible technologies slow growth.

Qualcomm has since had a tumultuous relationship with Europe, even though its CDMA technology is now used in 3G systems there. In recent years, Qualcomm has begun expanding into new areas beyond CDMA, perhaps because it is unclear if the technology will be used in future generations of mobile phone systems. Such new areas, like mobile TV, offer the company an opportunity to do more business in Europe and around the world.

British Sky Broadcasting Ltd., a U.K. cable company, has tested the MediaFlo system. Qualcomm is also marketing its Brew system in Europe. Brew is a development platform that competes with Java. Telecom Italia SpA's mobile arm has commercially launched services using Brew.