Sky Italia is following its UK sister operation and is expanding its OTT fibre-based package of channels. Sky Italia will now work with Telecom Italia (TIM) and other telcos.
A report from equity analysts at Deutsche Bank says this is a negative report for Eutelsat given that Sky Italia is their largest single client and – no doubt coincidentally – is about contract/transponder renewals with Eutelsat.
The bank’s note says: “This removes the need for new subscribers to take a satellite offer and may, in future, enable the operator to offer separate lower pricing for fibre packages to reflect the lower cost of fibre equipment/install vs satellite dish. SkyItalia had already announced plans to offer fibre-only deals in the UK and in Italy via OpenFibre, but OF had limited coverage.”
“Offering via TIM & other telcos will expand the offer significantly in reach. Eutelsat is set to enter negotiations to renew its long-term contract with SkyItalia later this year. The group represents 6% of ETL revenues and >10% of earnings and risks of a major cut in spend is part of our SELL case and below-consensus forecasts for ETL.”