Comcast’s SKY launches broadband offering in Italy

MILAN (Reuters) – Italy’s top pay-TV operator SKY said on Tuesday it was providing a wider range of services to households as it added a broadband connection in 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 outbreak when Italy’s data traffic using fixed lines almost doubled as people worked and studied from home, and spent their 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 the plans did not include offering mobile services.

Italy has one of the lowest fiber-to-the-home usage in Europe. Demand for ultrafast home connections is expected to rise in the coming months, as many people are expected to continue working from home.

“We have been forced home, putting the Italian telecoms infrastructure under great stress,” said Ibarra, a former top executive at Dutch telecoms operator KPN (KPN.AS).

SKY has invested 230 million euros ($261 million) to launch its broadband service in Italy, he said.

SKY will provide the service using the fiber-optic infrastructure of wholesale broadband firm 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 be extended 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 entrance in the broadband business will add pressure on former state phone monopoly Telecom Italia (TLIT.MI), which has steadily lost market share in the fixed-line segment.

The content services offered by SKY, which has 5.2 million customers, are facing increasing competition from streaming services like Netflix (NFLX.O) and Amazon Prime Video (AMZN.O).

(This story corrects spelling of Ibarra’s first name in para 3)

Reporting by Giulio Piovaccari and Elvira Pollina; Writing by Giulio Piovaccari; Editing by Edmund Blair

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