Swisscom, the Swiss telecommunications company, has successfully bid to acquire the majority of Fastweb, the Italian broadband provider and pioneering internet protocol television operator. Swisscom has also invested in a San Francisco online and mobile video startup, Kyte.tv.
Swisscom says it is investing in Fastweb with the clear objective of further exploiting the Fastweb competitive advantages and technological lead. The Fastweb business will continue to be separately managed by the existing team and will retain its brand in Italy.
Swisscom will acquire over 80% of Fastweb for a total purchase price around £2.1 billion and assume its debt of around £0.75 billion. Swisscom will finance the acquisition primarily through borrowing.
The Swiss telecommunications company offers fixed and mobile telephone services, broadband and its Bluewin television package. The Bluewin service is based on the Microsoft IPTV Edition platform with which Swisscom initially struggled.
Fastweb was one of the first successful operators of an internet protocol television service, creating its own technical platform in partnership with various vendors. Although Fastweb made much of its video services, most of its business was based on broadband.
Kyte.tv combines user-contributed content, social networking and mobile services to enable users to create interactive television channels online, on their mobile phone and eventually on television.
Swisscom Mobile was the first mobile network operator to offer kyte.tv, starting a limited free user trial in February.
Swisscom says that it was drawn to kyte.tv at an early stage and finds the idea of personal television programming very attractive. It has therefore entered into a strategic and financial partnership with its operator, decentral.tv.
“We have invested in kyte.tv because we strongly believe in kyte.tv’s vision of reinventing TV for a generation who spends more time in front of the computer or on their mobile phone than they do watching traditional TV,” said Peter Trinkl, head of strategy and business development at Swisscom Mobile.
Kyte has received additional backing from Swisscom and a number of other European investors. They join a group of original venture capital investors that have been behind some of the most successful online startups, including Google, Hotmail and Skype.
Daniel Graf, the co-founder and chief executive of kyte.tv said the backing was of strategic importance. “It is a great endorsement of the fact that kyte.tv is the first company to bring together user-generated content, social networking, and mobile services.”