Our take...
In a market where cable dominates so completely as Switzerland, opportunities for new IPTV services can be limited. Investing in a market devoid of cable TV provides a superb opportunity for an operator currently restricted to a stagnant home market. The price however, at a 19 per cent premium, may have been a bit steep. Swisscom, although initially offering at the market value of the shares, evidently intends to ensure that no other potential buyers will even consider acquiring the Italian operator. Shares in Swisscom fell following the announcement though, indicating that the investment community also considered the price to be too high.

Unlike cable, IPTV services tend to be locally owned, launched by regional telcos. Even those operators, like Telefonica or Telecom Italia, which have launched services in multiple countries, have stuck to the markets where they have a strong fixed line presence (for obvious reasons). Consolidation has not yet occurred in the IPTV market- indeed it is very early in the day for IPTV operations. Acquisitions such as this however, could mark a significant change in attitude towards IPTV services, and more mature operations, like that of Fastweb, could find themselves up for sale to international bidders. Still, few IPTV services are as established as Fastweb, so it will likely be a year or two before significant developments are noted on this front.