Will economic pressures hinder AT&T's TV debut?

It's been about a year since AT&T announced its intent to use Qualcomm's MediaFLO technology to launch a mobile broadcast TV service, and many in the industry expect the service to finally launch in the coming week.

I don't know what types of promotional offers AT&T will unveil to lure subscribers to this new service, but I suspect its long-awaited debut may be hindered by the current softness in the economy. In fact, I wonder if AT&T isn't regretting pushing back its launch of the service from late 2007 until early 2008 now that the economy has taken a turn for the worse.

If AT&T truly wants to gain traction in the market with its mobile TV offering, the operator will not only have to differentiate its service with its programming, but it will also have to come up with some creative pricing scenarios. This could be a prime opportunity for ad-supported mobile TV content to finally gain some traction.

During recent fourth quarter earnings calls, both AT&T and Verizon Wireless executives assured investors that they haven't seen any impact from the economy on their wireless services. In fact, growth in data services is a strong as ever. Verizon reported data makes up about $11.06 in retail ARPU. In addition, it said that its customers sent and received 45 billion text messages and 927 million picture/video messages in the fourth quarter. AT&T reported fourth quarter postpaid data ARPU of $12. Its customers sent 496 million multimedia messages and more than 32 billion text messages in the fourth quarter.

However, I suspect that when it comes to the uptake of a new service, particularly one like mobile TV, customers will have second thoughts. I think that in the months ahead we'll see consumers be more reluctant to upgrade their handsets and commit to new entertainment services such as mobile TV. -Sue