Italian mobile phone operator 3 yesterday became the first mobile company to buy a TV station, snapping up regional Italian broadcaster Canale 7 as part of its plan to launch a nationwide digital TV service for mobiles.Canale 7, based in northern Italy with a network that reaches about 40% of the population, owns a digital TV licence. 3 intends to use the licence for a nationwide mobile TV network to complement its wireless network. The aim is to create what the company believes will be one of the world's first "triple-play" mobile services - ie, offering a telephone, TV and internet access in one device.
The deal is part of a €220m (£151m) investment in mobile TV announced yesterday by 3 Italia, which is majority-owned by Hong Kong conglomerate Hutchison Whampoa. The price paid was not disclosed but is believed to have been several tens of millions of euros. The cash was provided by 3's recent €1.2bn capital increase; the rest of the money will be used to repay loans owed to Hutchison. 3 Italia has had to delay its flotation to finalise the deal. Originally due before the end of the year, the float on the Milan stock exchange is now expected in the first quarter of next year.
3 is buying Canale 7 from the privately owned Profit Group, which was built up by Italian media magnate Raimondo Lagostena. Mr Lagostena, whose empire also includes broadcaster Odeon TV, will become a consultant to the business.
Hutchison, which also owns mobile operator 3 in the UK, has spent an estimated €9bn on a licence and network to offer 3G mobile phone services, which allow its 4.8m customers to download music and video and make video calls.
Many mobile operators trying to increase revenues have started using their 3G spectrum to "broadcast" football clips and TV programmes. 3 Italia already has a mobile deal with NewsCorp's Sky Italia and carries Playboy adult content. It is also close to a deal with Mediaset, the broadcaster controlled by the family of Italian prime minister Silvio Berlusconi.
However, "Broadcasting" TV over a 3G network is a very inefficient use of costly mobile phone spectrum. Under 3's ownership Canale 7's traditional broadcasts in the north of Italy would be switched off and the company's resources poured into creating a nationwide mobile service using technology called DVB-H, essentially a pared-down version of the existing digital TV signal.
In the UK, regulatory restrictions on the use of spectrum are hampering the use of DVB-H, although O2 is running a trial TV service using the technology in Oxford.
Source:
http://business.guardian.co.uk/story/0,,1653069,00.html
