Swisscom moves to bolster multimedia services

Pictures speak a thousand words for telecoms provider Swisscom RTS

Switzerland’s leading telecoms operator, Swisscom, has taken another key step towards offering broadband television services.

The company announced on Friday that it would buy a 49 per cent stake in Swiss media content firm Cinetrade for an undisclosed price.

The deal, which is subject to regulatory approval, gives Swisscom access to much-needed content and distribution channels.

It also comes shortly after the company unveiled plans to pipe television signals into customers’ living rooms via the telephone line, in collaboration with United States software giant Microsoft.

A Swisscom spokesman said the agreement would help “to supplement the core activities of telephony and internet with TV over broadband internet”.

“The Cinetrade Group will give Swisscom access to expertise, content and distribution channels that will drive the implementation of this strategy forward,” he added.

Facing competition

Swisscom is facing increasing competition from cable television firms that provide broadband telephone services, as well as from mobile network operators looking to invest in multimedia services.

“Swisscom… faces growing competitive pressure from companies that operate in the TV market and we will therefore expand our services in that field,” said company chief executive Jens Alder.

Swisscom has been forced to refocus its domestic strategy following a ten-year history of failed mergers and takeover bids outside Switzerland.

This year alone has seen the sale of its stake in German mobile service unit debitel as well as the collapse of plans for a merger with Telekom Austria.

Strategic focus

Multimedia is clearly a central pillar of the company’s new strategy, with three Swisscom Group units – Fixnet, Broadcast and Mobile – all developing offerings in this area.

Cinetrade’s activities include pay-TV (Teleclub), cinemas (Kitag) and the exploitation of video or DVD film rights (PlazaVista).

Teleclub is the leading pay-TV provider in Switzerland, with some 70,000 customers using its cable services.

Swisscom says it will be able to increase its stake in Cinetrade over the next few years.

The company’s current owner, Stephan Sager, will remain as CEO.

swissinfo with agencies

Key facts

Cinetrade’s activities include pay-TV (Teleclub), cinemas (Kitag) and the exploitation of video or DVD film rights (PlazaVista).
Teleclub is the leading pay-TV provider in Switzerland, with some 70,000 customers using its cable services.
Swisscom has the option of increasing its 49 per cent stake in the future.

In brief

Swisscom will buy 49% of media content company Cinetrade, in a move to boost its multimedia content and distribution plans.

The company aims to gain customers by offering broadband TV services.

It hopes to leverage its large customer base to gain an edge over rivals like Cablecom, which already offers digital phone services via TV cable.