Sky Italia logs on to Fastweb

Telco to distrib satcaster's programming via IPTV

This article was updated at 4:17 p.m.

ROME — Rupert Murdoch’s Sky Italia on Monday inked a deal with Italy’s second-largest telecom operator Fastweb to distribute the satcaster’s full slate of programming to Fastweb’s rapidly growing IPTV customer base.

The two firms said they expect to fully integrate and launch the service in the first quarter of 2007.

Also, as part of the arrangement, Sky Italia will promote Fastweb’s telephone and broadband services to its customers, giving the News Corp. division an important entry into these markets. Financial terms of the deal were not disclosed Monday.

As of September, Fastweb had 170,000 IPTV subscribers, making it the fifth-largest provider of broadband-based television in the world. The nascent IPTV market is expected to surpass 31 million households worldwide in the next five years, making it an extremely enticing new business line for indebted telecoms firms.

In Italy, the rapid deployment of high-speed data lines by Fastweb and Telecom Italia has created an emerging market for IPTV over the past two years. The two companies have begun lining up content partners in preparation for the digital TV switchover in the coming years.

Last month, Telecom Italia struck a deal with 20th Century Fox Films to distribute movies to customers of its broadband service, Alice. And, Fastweb and Sky had previously struck a content arrangement whereby Fastweb would distribute Sky’s premium package of soccer, cinema and sports content to its IPTV customers.

The deal signals Sky Italia’s increased interest in the Italian broadband sector.

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