Inline with government recommendation to migrate analogue broadcasting system to

digital broadcasting system, P. T. Digital Mobile Network was established on August 6th, 2007. P. T. Digital Mobile Network focuses on digital broadcasting for mobile devices, such as handheld devices, automobile receivers and notebook receivers. The ' services will be launched early next year, therefore it is important to understand the response of the market toward Mobile Digital TV (MDTV).

The objective of this project is to explore the response of public towards MDTV through market research. This market research was first focused on the behavior of respondents towards handheld devices, including its purchasing decision, monthly spending and payment method for the expenses. Secondly, this research explored the enthusiasm of respondents regarding Mobile Digital TV in handheld devices, including their willingneSs to purchase new handheld devices that support this service, willingness to subscribe for non-free program, exffected programs, daily usage, term of payment and expectecf subscription fees. In addition to that, this research also explored the enthusiasm of respondents toward MDTV in automobile and notebook.

This is a descriptive research that focuses on field survey. There are two main methodologies that are used in this research; quantitative method by distributing questionnaires and qualitative method by conducting Focus Group Discussion (FGD). Questionnaire was used to collect immediate responses from respondents, whereas FGD was used to get deeper 1lnderstanding and insight that might not be captured using elose.ended questionnaire. The sample size for this research is 960 respondent fur questionnaires, and 36 participants for FGD. The targeted respondents are people that are aware of handheld devices, live in JABODET ABEK area with middle-up social economy status.

From the questionnaires, 61 % of the respondents are interested in MDTV. There are no significant differences in interest level between genders, area or across the whole age range, except for the respondents above 50 years old. However, interest of



respondents varies with their level of education; the higher the education, the more the interest toward MDTV. The interest of MDTV in automobile and notebook application also shows the same pattern to handheld device.

Furthermore, it is known from the research that the most expected contents are news

and entertainment, while the highest willingness to pay extra free for programs are dominated by film and music programs. 94% of respondents will watch MDTV for more than 15 minutes and most of them prefer to watch MDTV in the evening.

The willingness to purchase additional handheld device that can support MDTV, however, is lower than what they are willing to spend for present mobile phone. This behaviour may arise due to minimum knowledge of the product feature and quality and also biased by the price of present local product that support analogue TV receiver that is available in the market. Respondents in this research are considering prepaid vouchers and post-paid billing together with cellular billing.

From Focus Group Discussion (FGD), most of participants from all groups showed concerns regarding the new handheld devices, that the new devices should have good quality of display, big size screen, long life battery, well-known brand and reasonable price. The participants also mentioned that MDTV has not yet been a necessity, but more to a lifestyle.

Through the analysis, it is better if MDTV is positioned as broad differentiation service. By broad, MDTV should be delivered to broad-customer base because there are no significant differences among genders, occupations and ages. By differentiation, it means that MDTV should sell its unique selling proposition in quality (good reception, real-time viewing and independent from bandwidth constraint), mobility (available everywhere at anytime) and personalized features (private usage and preferences). Overall, this position will enable P.T. Digital Mobile Network to achieve faster payback period, faster penetration rate and gain advantage as technology pioneer as MDTV service provider.

As for the marketing strategy for MDTV, this report also provides marketing mix strategy that can be used for initial market penetration. In terms of the product,



MDTV can be bundled along with the handheld devices. Handheld is offered at a cheaper price, but in condition that the customers are also bound to use the service for a certain period of time. This strategy can be used as a way to increase customers' switching cost during first year of penetration. As for pricing strategy, MDTV can be offered in many strategies to accommodate the needs of variety of customers, including pre-paid, post-paid, cash base or credit-base customers. In addition, billing can be offered by using vouchers or combining it with customers' monthly cellular phone bill. When it comes to promotion, it is very important to increase market awareness toward MDTV. This can be done by educating the market about MDTV technology and create "market curiosity", using talk-show in electronic media, or technology review on newspaper or magazine. In term of distribution, P. T. DMN can cooperate with mobile phone operators as a fastest way to capture wide-range of customers and simplify the billing method for the benefit of customers.

In summary, creation of market awareness, complete and thorough marketing strategy offering the unique selling proposition of MDTV in broad market, along with an excellent execution in 'launching the product and hardware support, are the key successes factors for this technology to be succeeded in the marketplace.

However, there is a limitation on the study, that the study may not depict the real response of the customer toward MDTV. Market awareness to the technology is very low; there was no customer experience in watching MDTV; there was no reference of the possibly offered handsets; and there is an analogue mobile TV -phone recently launched. All these factors might create a biased perception in the respondent and might affect their decision and behaviour to be like what was captured in the survey.

Therefore, we recommend that further study should be done periodically; first after several month of customer education, then early after product launch and the next is several months after the launch; to get a complete picture of customer response, behavior and insight on Mobile Digital TV.



Research Location : PT Digital Mobile Network

Confidential until 2013