Telecom Italia's assault on DTV

net1

Telecom Italia is reported to be in negotiations to sell its 19.9% stake in pay-TV operator Sky Italia to majority owner News Corporation in order to help finance its own digital TV services.

According to sources quoted by Dow Jones, a deal could be signed within two weeks giving New Corp 100% ownership of Sky Italia, although the two companies have yet to agree a price.

Even though it currently holds a Sky Italia stake, Telecom Italia has already started competing on soccer coverage by distributing certain games of the Italian championships via high-speed internet.

It was able to buy Sky's premium soccer content at a discount because of conditions down set by the European Union antitrust regulator when it approved the creation of Italy's virtual pay-TV monopoly in 2002. Under the conditions, Sky must provide discounted soccer coverage to alternative video providers until 2011.

And as Italy's third national broadcaster with its La7 television channel, Telecom Italia is also reported to be mulling buying some digital TV soccer rights for itself.

It is also understood to be testing technology with Microsoft and Alcatel designed to broadcast digital TV via the internet.