Swisscom adds 21K IPTV Subscribers in 1Q09

Swisscom added 21,000 Bluewin TV IPTV subscribers in 1Q09 giving 139,000 total subscribers.

Swisscom continues to make steady progress with its IPTV service.

Swisscom Adds 23K IPTV Subscribers in 4Q08

Swisscom added 23,000 new IPTV subscribers in 4Q08, ending the year with 118,000. The company had $US 129M in IPTV revenue in 2008.

Swisscom had a good year with its IPTV service in a competitive IPTV market. Its new fiber deployment should enhance its position nicely.

Swisscom Adds 15K IPTV Subscribers in 3Q08

Swisscom added 15,000 Bluewind TV IPTV subscribers in 3Q08 giving it a total of 95,000 subscribers at the end of the quarter. The availibility of self-installation reduced the average one-time cost per new customer. At the end of February 2008, Swisscom added four HD channels in to its Bluewin TV service , and launched an offering without a hard-disc recorder.

Swisscom is experiencing steady growth of its IPTV service. It appears that its February service improvements have had a positive effect.

Swisscom Adds 16K IPTV Subscribers in 2Q08

Swisscom added 16 thousand IPTV subscribers in 2Q08 giving it a total of 80 thousand at the end of the quarter.

Swisscom's IPTV subscribers adds picked up in 2Q08. It appears that its new marketing effort has had some effect.

Swisscom IPTV has 64K Customers in 1Q08

Swisscom stated that it had 64 thousand paying customers at the end of 1Q08, adding 5 thousand during the quarter. The average cost per new customer, including installation, devices, and so on was reduced to under $US950. At the end of February, Swisscom added four HD , and launched an offering for first-time users, without a hard-disk recorder. It stated that its marketing activities were stepped up in April.

IPTV sales Swisscom appear to have slowed down in 1Q08. Stepping up its marketing efforts seems to be an appropriate thing for it to do.

Swisscom Has 70K IPTV Subscsribers

By the end of 2007, 70 thousand households had signed up for Swisscom's Bluewin TV IPTV service. This is an increase of 10 thousand in 4Q07 compared to 20 thousand in 3Q07.

The company stated that Bluewin TV had high costs associated with it, but that its TV quality has "markedly improved". It plans to start offering HD content in 2008.

Swisscom appears to be struggling with its Bluewin TV service. At this stage of its development, I would expect to see the number of new subscriber to increase on a quarter by quarter basis, or remain constant, at least.

Swisscom struggling to add 20K IPTV Subscribers

Swisscom added again added 20 thousand new subscribers in 3Q07 giving it a total of 60 thousand subscriptions installed and on order. While its Bluewin TV IPTV subscribers are satisfied with the service's content, features, and usability, there is significant dissatisfaction due to technical issues.

Swisscom stated that it has already made major improvements that have resulted in:

• Cut the relative call volume in half over the last six months.
• Reduced order fulfillment time by one third

Swisscom has put its priority on achieving stability, which has kept the costs of the service high. It plans to improve the stability and quality of its IPTV system including connectivity, encoders, and its IPTV software system. It plans to install new encoders that will improve audio and video quality in 1Q08.

Swisscomm expects to reduce the costs to install its Bluewin TV service to about $650 per subscriber over the next year through a self install program that will include:

• Line prequalification and self install
• A lower price for a self install
• A cheaper set-top box
• Reduction of call volumes and efficiency improvements

It will be tough for Swiscom to achieve its goal of 100 thousand IPTV subscribers by the end of the year. It would have to double its rate and sign up 40 thousand more subscribers during the fourth quarter.

I wondered if Swisscom would tap into FastWeb's IPTV expertise at the time of the acquisition. It appears that Swisscom could really use the help to stabilize its service.

Swisscom has 50,000 IPTV Customers

Swisscom announced that it had over 50 thousand Bluewin TV customers signed up and installed at the end of 2Q07. It had 25 thousand customers installed and another 15 thousand signed up but not installed at the middle of May. It cited its IPTV introduction as having a particularly negative effect on its EBITDA.

It looks like Swisscom is adding 20 thousand IPTV subscribers per quarter. This keeps it on the path to achieve the 100 thousand subscribers by the end of year that it previously announced.

I can't help to point out that Swisscom in a small country has been able to get about as many subscribers in 8 months of service that ATT has achieved in its first 12 months of service. Both use the Microsoft Media Room software system. I suppose that a more compact deployment is easier to manage than the expansive deployment that ATT is doing.

Swisscom IPTV Profitable in 2009

Swisscom does not expect to see profits from its Bluewin IPTV service over the next two years. Swisscom would need 200,000 to 250,000 customers for Bluewin TV to yield profits and expects to get there by the end of 2009.

The service has been installed in 30,000 to 40,000 households. Swisscom is currently adding about 1,000 to 2,000 households every week.

Swisscom continues to do well. I think that reaching profitability in three years for such a complex service is a very positive sign.

Swisscomm FastWeb Tender Succeeds

Swisscom's tender offer for FastWeb stock was successful with an acceptance level of 80.7 percent. This will give Swisscom ownership of 82.4 percent ownership of Fastweb stock when its own 1.7 percent of FastWeb shares is added in. The settlement of the tender offer will take place on May 22, 2007.

Swisscom will start to work with Fastweb to develop business plans and explore forms of cooperation in more detail. Fastweb's operations will continue to be managed separately. Swisscom will retain the Fastweb brand in Italy.

This arrangement should benefit both companies. FastWeb should be able to help Swisscom with its own IPTV offering.

FastWeb adds 20,000 IPTV Subscribers

FastWeb added 20 thousand IPTV subscribers during the first quarter of 2007 for its new offering of the Sky Italia content over its IPTV service. This service became available to only existing FastWeb customers at the beginning of March 2007. This service became available to new FastWeb customers at the beginning of April 2007.

Based on this news we estimate that FastWeb new has 225 thousand IPTV subscribers. The impending combination of FastWeb and Swisscom should make the combination the number three TelcoTV service in Europe after Free and France Telecom and before Neuf Cegetel and Belgacom.

Swisscom at 40,000 IPTV Subscribers

Swisscom announced that 40 thousand people had signed up for its IPTV service that was launched in November 2006. There are more than 25 thousand with the service installed today.

The tender for FastWeb stock is open through May 15. We should hear as early as May 16 whether or not it will be successful. Silvio Scaglia, the founder of FastWeb, has tendered his shares. Swisscom will consider the tender successful if it receives at least 50 percent of the shares but will likely proceed if around 49 percent of the shares are tendered.

Swisscom is doing well with its new IPTV service and seems to be on track to have at least 100 thousand IPTV subscribers by the end of the year.

It will be interesting to see how it changes its IPTV strategy after the FastWeb acquisition is complete. I think there is a good likelihood that it will abandon its Microsoft software and replace it with the FastWeb system. The company could easily integrate both service together.

Swisscom has 30,000 IPTV Orders

Swisscom had 3o thousand IPTV orders in February, four months after the service was introduced. Swisscom's BluewinTV service offers 100 broadcast channels and 500 on demand videos. BluewinTV is available to 75 percent of the population in Switzerland. Swisscom stated that it has not advertised the service extensively and believes that there are indications that it prevents churn.

Swisscom has had a good reception to its IPTV service. It will be interesting to see how it integrates its BluewinTV with Fastweb's TV service. I will not be surprised to see Swisscom replace its Microsoft software with FastWeb's home grown software.

Swisscom Chasing fast Web

Swisscom plans a tender an all cash offer of 47 euros per share for 100 percent of the shares of FastWeb, the IPTV pioneer and leading competitive carrier in Italy. The total cost to Swisscom will be 3.7 billion euros. Silvio Scaglia, the founder and leading stockholder in FastWeb has accepted Swisscom's proposal. This Swisscom deail will allow Scaglia to fully liquidate his investment in FastWeb, something he has wanted to do for more than a year now. FastWeb's board of directors will consider Swisscom's offer today.

Swisscom stated that it intends to make long term investments in FastWeb based on a new generation of network and innovative offerings in Italy. Swisscom stated that the acquisition would strengthen it in three ways:

• FastWeb has a lead of 3 to 5 years in new technologies that will strengthen Swisscom's infrastructure.
• FastWeb has a competitive edge in multimedia applications including IPTV.
• FastWeb will boosst Swisscom's cash flows significantly since it is a high growth company with increasing cash flows over time.

This acquisition solves a strategic problem for FastWeb. Silvio Scaglia has wanted to bail for more than a year and forced the payment of a 300 million euro one time dividend to liquidate a part of his investment in FastWeb. It also gives Swisscom a very strong entry into the Italian market and access to the latest technologies. It will be a good deal for both companies as long as Swisscom can maintain FastWeb's business and technical expertise.

Swisscom has 20,000 IPTV Orders

Swisscom has received 20,000 orders for its Bluewin IPTV service since it was introduced two months ago. It has installed 10,00 subscribers and its installation rate is running 1,500 per week. Its working to get its backlog down to three to four weeks.

This makes Swisscom the largest announced Microsoft IPTV Edition Software installation. It is generating orders at a significant rate. Now if ATT could only do this!