Italian broadband subscribers recently topped 8 million

ROME — Mediaset is planning to launch an on-demand Internet television service next year to take on Telecom Italia and a host of ISP rivals that have established an early lead in the nascent market.

With the number of Italian broadband subscribers recently surpassing 8 million, it has triggered a sudden burst of activity among Italy’s largest telecoms, Internet and now media companies to lock in customers to monthly contracts for Internet protocol TV.

The move comes at a particularly important stage for Mediaset as analysts are predicting a TV advertising slump for 2007 that could weigh on the Silvio Berlusconi-controlled broadcaster’s bottom line.

Meanwhile, Telecom Italia, and ISPs Fastweb, Tiscali and telecoms operator Wind have either established IPTV services of their own or will launch one before the end of the year. And, last month, Fastweb expanded its alliance with Rupert Murdoch’s Sky Italia to broadcast the satcaster’s full slate of programming to Fastweb’s 170,000 IPTV customers in the first quarter of 2007.

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