IPTV service launches in Portugal

PT service has 88 channels

LISBON — Portugal Telecom launched an 88 channel Internet Protocol Television service Thursday.

PT controls more than 90% of the landline telephony, close to 80% of the broadband Internet market and, via subsidiary TMN, more than 50% of the mobile telephony business in Portugal.

Another subsidiary, PT Multimedia, controls more than 80% of the cable and satellite TV business in Portugal, under the TV Cabo banner. PTM, which is also a leading film distrib and owns 148 movie theaters, is set to be spun off as a separate company in September.

The launch of the IPTV service, which includes video-on-demand and True HD content, will transform PT into a quadruple play operator (fixed and mobile telephony, Internet and TV), which will heighten competition between PT and PTM.

PTM, which is a triple-play operator (telephony, Internet and TV), has been subject to intense investor speculation since the failure of Sonae.com’s takeover bid for PT in March 2007 and the announcement of PTM’s spin off.

PTM is expected to represent the biggest domestic competitive challenge to PT, via expansion of its telephony operations, while PT will now attempt to make major inroads into the TV business.

PT has invested over Euros 10 million ($13.3 million) to date in the service, and will initially launch IPTV in three target markets — Lisbon, Oporto and Castelo Branco — but intends to roll out the service to the entire country, with more than 100 channels, in the coming months.

PT’s executive president, Rodrigo Costa, has dubbed the new initiative as “PT’s most important project over the coming years.”

Other domestic operators such as Sonae.com, Cabovisao and Ar Telecom, have also launched IPTV services, but to date IPTV’s overall market share is miniscule. PT hopes to radically alter this situation.

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