Swisscom launches internet TV

Video on demand is one of the key features of the new service Keystone

The telecoms group, Swisscom, has launched a pioneering television and video service, becoming one of the world's first to offer Internet Protocol Television (IPTV).

The new service, Bluewin TV, enables Swisscom to go head-to-head with leading cable television operators in the country such as Cablecom.

IPTV is a key tool for telecoms operators competing with the cable TV carriers’ combined package of phone, broadband and TV services.

According to industry analysts, the global IPTV market is expected to grow eightfold by 2010 to around 50 million subscribers, worth some $13.2 billion (SFr16.4 billion) compared with $872 million today.

But the figures hide the extremely varied situations between countries. The United States, for example, is currently experiencing the fastest growth. And in western Europe more than three million homes receive television programmes via their phone lines, but half of them are in France, where three major cable operators offer this service.

Swisscom has now entered the race, offering 100 television and 70 radio channels, 500 major films on video on demand and live sporting events.

Cablecom, the leading Swiss company offering cable television, announced its riposte. “We will soon be able to offer even more attractive digital TV,” countered Rudolf Fischer, the Cablecom’s managing director.

However, IPTV is unlikely to be the cash cow most people are predicting, and many questions still remain unanswered.

Scepticism

In order to compete with cable or satellite television, Swisscom will have to appeal to customers by using an extremely competitive pricing structure and interesting programmes.

The Swiss telecoms group Sunrise, Swisscom’s main rival, is sceptical about the news.

“You’ll have to wait and see if there really is strong demand for IPTV in Switzerland, as most homes already pay for programmes as part of their rent,” said Jesper Theil Eriksen, Sunrise’s chief executive.

But IPTV could also be a strategic move for Swisscom. The service will enable it to keep its traditional customers for voice and data services, while selling them additional products such as video on demand.

From now on customers will only have to deal with one single provider for telephone calls, high-speed internet connection and television channels.

Video on demand also seems to have a rosy future ahead of it. Film production companies, television channels, cable operators, internet providers and all big film studios from Warner Brothers to Walt Disney have started to become involved in video on demand for internet protocol.

swissinfo, Luigino Canal

In brief

Swisscom is the dominant player in the Swiss telecommunications market.

It had a monopoly until 1998.

In November 2005 the government announced it wanted to sell its 62% stake. It also banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland’s Eircom.

But it later clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.

In June 2006 parliament threw out privatisation plans amid concerns that foreign owners might neglect the Swiss network.