MILAN (Reuters) – Italy’s top pay-TV operator SKY said on Tuesday it was adding broadband connection to its offering of movies, sport and other content, to boost revenues in the crowded telecoms market.
The Comcast unit (CMCSA.O) announced the move after a two-month lockdown to curb a coronavirus epidemic, when data traffic using fixed lines almost doubled in Italy as people worked and studied from home, and spent free time streaming videos.
“We’re interested in becoming the main player in people’s living rooms and the rest of their homes,” the head of SKY’s Italian operations, Maximo Ibarra, said in a presentation, adding that SKY did not plan to offer mobile services.
Italy has one of the lowest rates of fibre-to-home usage in Europe. Demand for ultra-fast connections is expected to rise as many people are likely to continue working from home.
Ibarra said SKY had invested 230 million euros ($261 million) to start its broadband service.
It will use the fibre-optic infrastructure of wholesaler Open Fiber, jointly owned by Italian utility Enel (ENEI.MI) and state lender CDP.
SKY’s service will start in 26 cities this month and will extend to 120 during the summer.
Ibarra said it would spread further as Open Fiber’s coverage expanded. In the meantime, SKY has signed a deal with Swisscom’s Fastweb (SCMN.S) to reach clients in areas not currently covered by Open Fiber.
SKY’s move into broadband will add pressure on the former state phone monopoly Telecom Italia (TIM) (TLIT.MI), which has been losing fixed-line market share.
Rome has made ultra-fast broadband a priority and urged TIM and Open Fiber to agree on creating a single network.
Ibarra said a single network was best for Italy but that it must not be controlled by a vertically integrated operator such as TIM.
Reporting by Giulio Piovaccari and Elvira Pollina; Writing by Giulio Piovaccari; Editing by Edmund Blair and Kevin Liffey