Switzerland’s leading telecoms operator, Swisscom, has announced details of its plan to pipe television signals via the telephone line into customers’ living rooms.
The move comes two months after rival Cablecom began offering digital telephone services via its broadband cable network.
The subscription-based service – to be offered by Swisscom’s subsidiary, Bluewin, in collaboration with US software giant Microsoft - will initially provide 25 channels, five pay-TV channels and video-on-demand.
An integrated video recorder will allow television viewers to pause and record live broadcasts using a remote control.
"The huge advantage of this technology is... that it is interactive and has made delivery of TV programmes on-demand possible," said Timothy Fritzley of Microsoft.
Bluewin spokeswoman Melanie Schneider told swissinfo that the service would not be the same as existing cable television packages.
"What we are offering includes features which are not part of cable TV at the moment," said Schneider.
"These include, for example, the live pause function and video-on-demand. So all in all we think it's going to be a different, clever way to watch television," she added.
Adrian Bult, chief executive of Swisscom Fixnet, said the long-term aim was to provide television, internet and telephone services in one integrated system.
“Our goal must be… to offer telephone and internet services in a networked home, and even television in future,” he said.
Swisscom will test the new technology in 600 homes during a four-month trial period starting in September. It plans to roll out the service across the country in the first half of 2005.
Swisscom chief executive Jens Alder told investors in March that the firm planned to spend more than SFr1 billion on the new technology to pipe television signals into living rooms.
The move is a direct challenge to Cablecom, which supplies about two million Swiss homes - 50 per cent of the market - with cable-delivered television and radio channels.
Alder said Swisscom had no choice but to provide a TV alternative to Cablecom, given the increasing threats to its fixed network – not least from regulators who have vowed to remove its exclusive rights to the country’s phone lines.
Schneider said the aim was to make the television venture profitable as soon as possible.
"The goal is certainly to make the service profitable, but to say that we will reach profitability in a particular month next year is not really possible," she said.
Cablecom said it had taken note of Swisscom’s new service offer.
“With this new service... an additional competitor has entered the market, and we take this competition very seriously,” said company spokesman Stefan Howeg.
But he added that the television subscription services offered by Cablecom were not the same as those unveiled by its new competitor.
“The service is not comparable with our own, because Cablecom offers more than 50 analogue television channels and around 100 digital channels.”
Cablecom has also recently started offering a digital telephone service in a bid to eat into Swisscom’s share of the home telephone market.
Rather than using traditional phone lines, which must be rented from Swisscom, Cablecom uses spare capacity on its broadband cable network to link people to the phone system via modem.
A pilot scheme launched in early 2003 signed up more than 32,000 households. The company officially launched the service in June and is aiming to reach 80,000 households by the end of the year.
swissinfo with agencies
Swisscom is 67% owned by the federal government.
Regulators are moving to undo its so-called "last-mile monopoly" on fixed telephone lines.
Cablecom offers a digital phone service using its broadband cable network.
Swisscom plans to invest SFr1 billion over 5 years in TV services.
Cablecom has 2 million customers; Swisscom will offer TV services to 600 households in a trial starting in September.
Swisscom has 4 million fixed-line customers in Switzerland; Cablecom has more than 32,000 digital phone subscribers.
Swisscom has 596,000 ADSL customers; Cablecom - unknown.