Sky Italia dominates the Italian pay-TV market with over 3.8 mil subscribers. Although the firm has innovated with DVR and HD offerings, it lacked a triple-play strategy, a fact which put it at serious competitive risk given the emergence of telco triple-play offerings from Fastweb, Telecom Italia and Tiscali. The deal puts Sky Italia firmly in place as the player to beat long-term as its top-tier programming can once again be a primary competitive differentiator now that it too can offer subscribers data and voice services.

Fastweb, already in the record books as one of the first significant IPTV deployments globally, is now much better positioned to compete against national heavyweight Telecom Italia which aims to make a major IPTV play near-term.

The deal moves Italy closer to a state of hyper-competition even though the nation lacks a significant cable infrastructure.

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