SKY, the largest pay-TV operator in Italy, announced that it is adding a broadband connection to its offering of sports, movies, and other content in a move aimed at boosting the company’s revenues in the telecom market. Comcast Corporation (NASDAQ:CMCSA) announced the new move following an increase in data traffic using fixed lines as many people studied and worked from home after a two-month lockdown to curb a coronavirus epidemic. Many people also spent a lot of their free time streaming videos.
Maximo Ibarra, the head of SKY’s Italian operations, said their target is to become a leading player in people’s homes in Italy. Europe has one of the lowest fiber connection but demand for fast internet connection as many people continue working from home.
According to Ibarra, they have invested $261 million to start offering broadband services. The new service will use the fiber-optic infrastructure of wholesaler Open Fiber, which is jointly owned by state lender CDP and Italian utility Enel. Ibarra said that they are working on expanding their services, counting on the expanded Open Fiber coverage. At the same time, SKY has entered into an agreement with Swisscom’s Fastweb to reach clients that are currently not covered by Open Fiber.
Growing Competition in the broadband sector
The entry of SKY into broadband is expected to increase competition on Telecom Italia, a state phone monopoly, which has been losing its market share at a high rate in recent years. Provision of ultra-fast broadband is one of the key priorities of the Italian government, which has urged Open Fiber and TIM to work to come up with a single network. According to Ibarra, the single network is the best option for Italy, but there is a need for the network to be under a vertically integrated operator. The program will start in 26 cities before spreading to 120 others during the summer.
SKY also offers content services and has around 5.2 million. The company has been facing increasing competition from streaming services like Amazon Prime Video and Netflix.