RAI holds key to Italo digital TV

Rupe's plans hinge on pubcaster's decision

MILAN — The future of digital TV in Italy is expected to become clearer in the next few days, as pubcaster RAI must decide by Monday about an alliance with Telecom Italia and Rupert Murdoch.

If RAI and its French ally TF1 don’t reach a compromise with Telecom Italia and Murdoch by then, Telecom Italia could pursue other options.

During the summer, Murdoch reportedly offered to buy a stake in Telecom Italia’s multimedia unit Stream, the troubled paybox expected to become a vehicle for Italy’s second digital platform, competing against Canal Plus’ Telepiu.

Stream has 70,000 subscribers, while Telepiu’s digital service reaches 360,000 households.

According to financial sources, Murdoch is ready to buy 40% of Stream and invest about $2.4 billion to buy soccer rights if full agreement is reached with Telecom Italia.

But RAI, also interested in buying a stake in Stream and entering the pay TV arena, has been slow to arrive at an agreement and has asked Telecom Italia to limit an eventual Murdoch stake to 20%.

Italy’s left-wing government has backed RAI’s request, fearing that Murdoch might reach a dominant role in Italian television. In the last few days, the government-controlled holding entity IRI, which owns 100% of RAI, decided to allot the pubcaster more financial means.

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