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News Corp.’s Italo paybox Sky Italia has surpassed 5 million subscribers, a milestone touted as boding well for further growth as the satcaster steps up competition with local rival Mediaset.

Since launching in 2003 as Italy’s single pay TV player, Sky Italia has been broadening its content to include more local productions, and ramping up innovation. It recently started streaming live TV to tablet devices and launched Sky3D, the country’s first 24-hour 3D channel.

Sky Italia competes with Mediaset’s Premium pay TV offering on digital terrestrial, launched aggressively, at a lower cost, in 2008.

Last year Mediaset had revenue of €2.77 billion ($3.7 billion), while Sky Italia had sales of $3.5 billion, according to the country’s telco regulator. However, Sky Italia surpassed Mediaset in revenue in the previous two years, the regulator said.

Both Sky Italia and Mediaset recently renewed their three-season deals with Italy’s Serie A soccer league.”In a challenging market, I feel confident that we can continue to grow by continuing to invest in creativity and innovation,” said Sky Italia CEO Andrea Zappia in a statement.

News Corp. in August named Zappia as Sky Italia topper to replace Tom Mockridge, the manager who succeeded Rebekah Brooks as head of its U.K. newspaper division, News International, following the phone-hacking scandal.

“Sky has always been a forward-looking company and we stand today better placed to grow than ever before,” said James Murdoch, who is Sky Italia chairman and News Corp.’s deputy chief operating officer.