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Cable/Video

Italians & Triple Play: It's Amore

With the rising interest in triple-play services, plenty of carriers would have been looking out for today's preliminary results from one of bundling's pioneers, Italy's eBiscom SpA, which offers its services as FastWeb. And, unlike the Italian national team in the recent European soccer championships, it's delivered the goods (see Carrier Comes Clean on Triple Play, Video Profits on Pause?, and eBiscom Reports Q2, H1 Prelims).

The subscriber base for FastWeb's offer of high-speed data access, VOIP, and video (including broadcast TV) over fiber and copper has been growing in leaps and bounds for the past few years, and the revenues have ramped up, too (see e.Biscom Ups Revenues in 2003 and FastWeb Piles On the Users).

Today's figures showed no let-up in the demand for the alternative operator's offering. In advance of its full results on August 27, it reported EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first half of the year of over €98 million (US$121.6 million), up a whopping 167 percent from the €36.9 million ($45.8 million) reported in the first half of last year.

In the second quarter alone, consolidated revenues were more than €178 million ($220.9 million), an increase from €111.7 million ($138.6 million) from a year earlier. EBITDA topped €52 million ($64.5 million), compared with €19.4 million ($24 million) in the second quarter of 2003. EBiscom also added 41,000 new customers, bringing the total to 417,500.

Those figures were boosted by the operator's expansion into three new cities -- Modena, Padua, and Bari -- just the sort of move the carrier can execute more quickly now that it's focused totally on the Italian market, having sold its German operation, HanseNet, to its main domestic rival, Telecom Italia SpA (NYSE: TI) (see Italians Invade Germany). The operator said last November that it plans to invest €60 million ($74.4 million) in network expansion during the next three years.

That focus on its home market is paying off, says Joel Cooper, a telecom analyst at World Markets Research Centre. “The investment that could have gone to HanseNet is now going to their Italian operations. I can’t see them returning to international expansion."

So what's next? Its current aim is to reach 480,000 broadband subscribers and revenue of €700 million ($868.8 million) by the end of the year, and it has a longer-term target as well (see e.Biscom Targets 800,000 Users by 2006). “It wouldn’t surprise me if they revised their customer and revenue targets upwards,” Cooper says.

And does the Italian Stallion offer hope to all those considering triple-play? While eBiscom has benefited from particular market conditions, such as a lack of cable operator competitors and short copper length for high-speed DSL, that are unlikely to be replicated elsewhere, its success in delivering and marketing its service in competition with a major national incumbent will at least encourage service providers looking to add VOIP and video to their data services.

– Nicole Willing, Reporter, Light Reading


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