The long-term prospects for Telecom Italia’s over-the-top TV service Cubovision look bleak after the telco withdrew from a supply contract with subsidiary Telecom Italia Media (TI Media).
The agreement, signed in 2007, and renewed only last year cover the supply of media content for distribution over both Cubovision and Telecom Italia’s earlier IPTV delivery.
In a statement, TI Media said the original settlement had been based on forecasts for the rapid expansion of IPTV and OTT platforms, however the slowdown in the market and pricing activities from the two main players [Sky Italia and Mediaset] meant the forecasts could not be met. The situation was further complicated by regulatory difficulties.
Following a recent reorganisation, Telecom Italia has decided to unify under the parent company all editorial activities relating to its platforms.
The termination of contract with Telecom Italia will have an immediate positive impact on TI Media’s 2011 net financial position estimated at around €20 million, though the same cannot be said going forward.
Telecom Italia only launched the Cubovision hybrid DTT/OTT box in December 2010. One of the suppliers is Cambridge-based Amino Technologies.