Sky Italia forms Open Fiber deal, adding key ingredient to MVNO rumors

Sky’s ambitious broadband-only TV initiative is set to make its mark in Italy from summer 2019, following a deal allowing Sky Italia to access Open Fiber’s FTTH network. The operator’s pay TV service Sky Q will be delivered over fiber, bringing next-gen features and faster streaming speeds to Italian users with the aim of stemming the flow of subs from pay TV over to OTT. In addition, the move adds some substance to long standing rumors of Sky going full quad play in Italy via an MVNO partnership – giving Sky Italia the option to use Open Fiber’s network infrastructure for wireless backhaul.

Some see FTTH networks working as complementary to mobile networks, delivering rapid data transfer speeds between mobile and fixed networks – offloading data to the fixed network in order to guarantee sufficient mobile bandwidth. The Fibre to the Home Council Europe claims using fiber for mobile backhaul is becoming the norm – and the rising demand for 4G and 5G is in fact contributing to the roll out of FTTH services.

Sky Q is delivered via Sky’s two main mediums – satellite and broadband. The deal with Open Fiber, a venture of state-controlled power utility Entel, will bring Sky services over FTTH to 271 urban parts of Italy by 2022 – a sizable project and quite the statement from Sky to its Italian competitors. Particularly as Sky Q over satellite only arrived in Italy back in November.

This is more or less how Fastweb in the early noughties launched one of the world’s first IPTV services, by piggybacking on fiber laid by power companies. The move won’t spare the blushes of Italian mobile operator Telecom Italia (TIM), which last year was accused of dawdling with its broadband investments by the Italian government, so Enel was drafted in to help meet demand, with Enel Open Fiber snatching the first tenders.

Recent moves by Sky include launching an OTT service in Spain, with no reliance on its satellite network. It already has Sky Now in the UK and an OTT video service launch in Germany called Sky Ticket; and the introduction of an enhanced mobile TV proposition, Sky Go Extra, in Italy. From what we can gather, few rival satellite operators in Europe are keeping pace with Sky in embracing the delivery of video over broadband. Of course, in a few years’ time, Sky will no longer be a satellite operator at all.

Sky Q is more than just a set top, it allows viewers to shift playback from one device to another, with a “My TV” style recommendations-based interface, powered by ThinkAnalytics. It can shift content around the home using a combination of WiFi and powerline – Turkish WiFi specialist AirTies has designed the powerline backhauled mesh to support multiple 4K screens, and MaxLinear recently got its MoCA chips into the Sky Q set top. Austrian electronics company Ruwido is behind the Sky Q remote which uses a touch pad and advanced voice control functionality.

In unrelated Sky Italia news, the operator also signed a content deal with Mediaset this week, to show 9 premium channels from the Italian media company, plus Sky’s sports content on the Mediaset Premium pay TV platform – in a much-needed deal for the volatile Mediaset business.

Mediaset’s share price spiked immediately as a result, which is interesting considering Sky has been rumored as a potential buyer of Mediaset’s troubled pay TV arm. Sky Italia will also license bandwidth from Ei Towers owned by Mediaset to support DTT pay TV services, and a source claimed to Reuters that Mediaset will not bid for Serie A soccer rights, after failing to make a return on investment from its expensive sports rights and losing market share to Sky. The content sharing deal may well be a precursor to a takeover, once the ownership of Sky is finally established (see separate story for details).

Sky Italia CEO Andrea Zappia said, “Sky’s mission is to be at the center of both innovation in the TV industry and the digitalization process of Italy. This agreement with Open Fiber is an important next step. We believe that pay TV has significant room for growth and fiber represents an innovative and simple way to deliver more quality TV and on-demand content into the heart of Italian homes.”

Elisabetta Ripa, Open Fiber CEO, said, “We strongly believe that our wholesale-only business model is the best way to accelerate the roll out and penetration in Italy of innovative ultra-broadband services, provided on a pure fiber infrastructure.”