Broadband giants battle for TV market

Just like the movies? This viewer isn’t part of the slanging match.

Switzerland’s leading telecoms firm has sparked a war of words by announcing its first concrete move onto the lucrative market for digital television services.

This content was published on March 3, 2005

Swisscom said on Wednesday that it would launch a new digital recording service, Bluewin TV 300, as a first step towards the introduction of a full-scale TV-over-Internet offer later this year.

The former state-run monopoly – still majority-owned by the federal government – is one of several European telecoms firms investing in TV services as well as voice calls and broadband Internet access.

But archrival Cablecom – the main provider of cable TV services in Switzerland – has hit back at Swisscom, saying it has been providing similar services for more than a year.

And it adds that Swisscom is effectively "hitching a ride" on its existing broadband cable infrastructure.

The latest row parallels the ongoing political dispute over whether rival telecoms operators should be granted direct access to individual households via Swisscom’s existing telecoms infrastructure – the so-called "last mile".

Analysts say it also masks a more fundamental question: whether Swisscom is really ready to launch its much-vaunted TV-over-Internet service.

Key difference

"Bluewin TV 300 is a digital video recorder packaged with an electronic program guide. So it's really just a box that records what comes in over cable," Helvea analyst Barry Ehrlich told swissinfo.

"The key difference to a standard video recorder you can buy at a retail outlet and connect to your cable or satellite service is that the system records specific programs rather than recording time slots, due to its integration with the electronic programme guide," he added.

"This adds an element of convenience especially in the case of live events such as sports, which can be delayed."

Similar services already exist in other countries, including the UK, where Sky Plus has nearly half a million customers signed up for a package that it introduced around two years ago.

Elegant packaging

"What is really different [about Bluewin TV 300] is that this has been packaged by Swisscom as a rental offer, instead of customers having to buy the hardware," said Ehrlich.

"It is being packaged and marketed in a much more elegant way... but what is not clear is why Swisscom is taking its first step [into this market] via the cable network, rather than directly via ADSL [broadband internet].

"Possibly there is some delay with Internet that we don’t yet know about – but it is also possible that they [simply] do not want to miss out on any way to attract customers."

A spokesman for Cablecom said integrated service packages delivering TV, Internet and telephony over its broadband cable networks had been on offer to customers since last year.

Cablecom adds that its full range of TV programmes – currently only available in analogue format – will be offered in digital format within the next few months.

As Swisscom tries to encroach on Cablecom’s broadband customers, Cablecom has also been trying to poach customers from Swisscom’s core voice-call telephony sector.

Swisscom has made it clear in the past that, while it plans to dominate the TV-over-internet market, it also intends not to neglect any additional "channels to market" – for instance, customers who decide to stick with cable TV services.

Backbone service

But Ehrlich said that, when it comes to developing TV-over-Internet services, Swisscom "will probably be one of the first operators anywhere in the world".

The Swiss company, which announced a joint venture last year with software giant Microsoft, says it is taking a "step-by-step" approach to implementing its so-called "triple play" strategy – based on the convergence of telephony, Internet and TV services.

The Bluewin TV 300 launch followed a three-month trial period.

In April, Swisscom plans to launch a new service offering telephony via ADSL, ahead of its scheduled introduction of the full TV-via-ADSL service later in the year.

Swisscom also offers a "backbone" transmission service to smaller cable operators, which gives them access to potential customers they could otherwise not reach directly.

Cablecom is Switzerland’s largest and best-known cable operator, but the country also has a large number of other – mostly regional – cable operators, who offer similar services but on a smaller scale.

swissinfo, Chris Lewis in Zurich

Key facts

Swisscom and Cablecom already offer broadband Internet services – cable and ADSL respectively.
They are trying to establish these as the basis of "triple play" offers, which integrate high-speed telephony, Internet and TV services.
Swisscom wants to poach TV customers from Cablecom, while Cablecom wants to acquire Swisscom’s telephony customers.

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In brief

Bluewin TV 300 comprises a (rented) digital video recorder and an electronic program guide.

Swisscom says the new service will be followed later this year by a full-scale TV-over-internet offer.

Analysts say the first-stage offering is "elegantly packaged", but may be partly a cover for technical delays with the full-scale internet TV offer.

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