Swisscom has launched a bid for Fastweb, the second largest fixed network operator in Italy. Fastweb was one of the first broadband providers to offer telephony and television services as a triple-play. Swisscom is offering Fastweb shareholders a premium to acquire 100 per cent of the company at 47 euros a share.
With more than a million customers, Fastweb is the leading alternative broadband telecommunications provider in Italy. It offers broadband, telephone and television services in more than a 130 cities and towns across the country.
Swisscom says that Fastweb has a lead of three to five years in technology infrastructure and a competitive edge in expertise in delivering video over broadband.
Fastweb was the first provider in the world to launch full broadband, voice and video services over internet protocols in 2001. Swisscom, which has launched its own video over broadband services under the BlueWin brand using the Microsoft IPTV Edition platform, says the experience will prove invaluable. In return, Swisscom will support plans by Fastweb to become a mobile virtual network operator in Italy.
Swisscom says that the Fastweb business will continue to be separately managed and maintain its existing identity. While Swisscom remains committed to the home market of Switzerland, it says it will generate additional growth through its presence in the highly attractive Italian market.
It is the first significant planned foreign expansion for Swisscom since the Swiss government blacked a bid for Eircom in Ireland.
Fastweb has yet to post a profit but there is potential for growth. Only a third of Italian households have broadband. Fastweb has 13% of those connections, well behind Telecom Italia.
The founder of Fastweb, Silvio Scaglia, recently sold some of his shareholding to invest in Babelgum, which plans to launch a global broadband video platform. He has in principle accepted the bid from Swisscom, unless he gets a better offer.