State aid: Commission authorises €37.6 million in aid from the French Agence de l’innovation industrielle towards the “Télévision Mobile Sans Limite” R&D project

The European Commission has decided not to raise any objections under the EC Treaty’s state aid rules to financial support granted by France for the research and development (R&D) project entitled “Télévision Mobile Sans Limite” (Unlimited Mobile TV). The project is headed by Alcatel-Lucent and involves ten other partners. Together, they intend to develop a solution combining satellite and terrestrial networks with a view to broadcasting television on mobile telephones. The aid amounts to €37.6 million.

In the words of Competition Commissioner Neelie Kroes, “this research and development project will benefit European consumers by broadening mobile television supply in Europe. I welcome the extensive collaboration between public research bodies and businesses of all sizes. The only regret I have is that, unlike its forerunners financed by the Commission, this collaboration does not extend beyond the frontiers of France”.

The Unlimited Mobile TV project seeks to develop a new mobile television broadcasting solution working in the S band (at the 2.2 GHz frequency). This will differ from the state of the art in the number of channels it will be able to broadcast, its reception quality, including inside buildings, and its extensive geographical coverage. By using a satellite it will be possible, for example, to reach non-urban areas and thus offer a new service to European consumers. The solution will also incorporate a crisis management service which will enable national authorities to alert the population quickly in the event of major disasters such as earthquakes, tsunamis, terrorist attacks, pollution incidents, nuclear accidents, etc.

The project is being coordinated by Alcatel-Lucent’s French subsidiary. It brings together three public research institutes and seven companies active in various business sectors, all of them located in France. Thales Alenia Space, which was formed by the acquisition by Thales of Alcatel’s shareholding in Alcatel Alenia Space (see IP/07/477), will carry out the satellite-related R&D.

Work began on 1 May 2006 and will be spread over three years. The Unlimited Mobile TV solution should be rolled out some time in 2009. Altogether, the project will cost €98.4 million. The support proposed by the French Agence de l’innovation industrielle consists of €16.1 million in grants and €21.5 million in repayable advances.

Technology similar to that which is to be used by Unlimited Mobile TV is already available in Japan and South Korea. It cannot be employed in Europe without creating difficulties with frequency planning. Mindful of the regulatory problems in Europe, the Commission decided, on 14 February of this year, to harmonise use of the radio spectrum in the 2 GHz frequency band for the implementation of systems providing mobile satellite services. Moreover, the Commission’s Information Society and Media Directorate-General is holding, until 30 May, a public consultation on a framework for selecting and authorising operators providing mobile satellite services in Europe.

The aid scheme operated by the Agence de l’innovation industrielle was approved by the Commission on 19 July 2006 (see IP/06/1020). In accordance with the new Community framework for research, development and innovation (see IP/06/1600), any aid granted under the scheme above certain thresholds must be notified individually and will be examined in depth by the Commission. The aid for the Unlimited Mobile TV project was thus notified by France on 19 December 2006. The Commission considers that the aid satisfies the conditions of the Community framework and hence qualifies for exemption under Article 87(3)(c) of the EC Treaty.

The analysis carried out by the Commission shows that the European markets for mobile television are still emerging and do not generate spontaneously the partnerships that are needed to bring about unlimited mobile TV. The aid makes it possible to tackle the market deficiencies which are hampering the speedy establishment of structured coordination between manufacturers of satellites, terrestrial network infrastructures, mobile telephones and semiconductors.

The aid’s impact on the competitive functioning of the affected markets should be limited despite the substantial market shares targeted by the project’s participants. The technology resulting from the Unlimited Mobile TV project will work on a standard known as DVB-SH, which was approved on 14 February by the Digital Video Broadcasting (DVB) forum and which is based on the existing DVB-H mobile broadcasting standard. The specifications of this new standard are accessible to the aid recipients’ competitors. The DVB-SH service will be introduced from 2009 and will operate alongside the mobile television services already on offer, which are meeting initial market demand.