Italy’s Fastweb clicks with Swisscom

Mediaset bid fails to emerge

The board of Italy’s leading IPTV provider, Fastweb, accepted a $62-per-share takeover offer from Swisscom on Tuesday, ending speculation that Silvio Berlusconi’s Mediaset intended to make a counteroffer and enter Italy’s growing broadband TV market.

Mediaset CEO Giuliano Adreani ruled out a rival bid for Fastweb earlier this month, but that has not stopped the Italian press from reporting that the country’s largest commercial broadcaster was still mulling a telco investment — either for Fastweb or a stake in Telecom Italia’s holding company Olimpia.

Mediaset wants to diversify its business to recoup more subscription revenues as the TV ad market begins to slump and remains committed to expansion this year.

During an analyst call earlier this month, the company reiterated its strong interest in “Big Brother” creator Endemol. Days later, it signed a confidentiality agreement with Endemol owner Telefonica — the clearest sign yet that it will be bidding for the reality TV producer.

Meanwhile, the Swisscom offer values Fastweb at $4.9 billion and makes founder Silvio Scaglia Italy’s newest billionaire media mogul.

Scaglia’s new venture, Babel Networks, will launch free TV and video-on-demand service Babelgum in the coming weeks. It will be viewable over the Internet.

While Europe’s IPTV market continues to grow, there is still little original content for the IPTV service providers. Scaglia’s plan with Babelgum is to broadcast niche digital programming, primarily from independent producers, and allow users to sort it into their own channels.

Babelgum’s primary competitor is Joost, a startup from Skype founders Niklas Zennstrom and Janus Friis.

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