The newest arrival on the Italian mobile market has made a resounding entry by offering multimedia services

Now it has built on this success by going into TV services. And yet, the Italians had already taken up mobile telephones in a big way – penetration is a massive 133%, meaning that there are more mobile phones than people. One would have thought there would be little room left for a newcomer. Yet in March 2003 3 Italia, a subsidiary of Hutchison Whampoa, became the first Italian operator to offer 3G services. Describing themselves as a “Mobile Media Company”, with all kinds of data services at the core of its packages, it quickly built up a strong penetration. By March this year it had 7.19 million customers, had captured 45% of the UMTS market and had the highest average revenue per user (AR PU) of any of the operators, at €44.6. In all, 35% of its revenue comes from services other than voice calls, more than double that of any of the other operators.

National broadcast network with a DVB-H licence

To differentiate itself from its competitors even further, 3 Italia decided to make content a key element of its offering, acquiring its own National Broadcast network with a DVB-H licence. This gave the company 80% population coverage for the 3G network at the end of 2005 and 75% of DVB-H coverage when it launched in mid 2006. At the same time it teamed up with television companies RA I, Mediaset and Sky Italia to develop an attractive range of content to put onto its network. It also developed La 3 channels, La Tre Show, La Tre Sport, La Tre Star, La 3 Live etc. To make viewing on a mobile easy and convenient, 3 Italia worked closely with handset manufacturers  (handsets launched LG U900 & Samsung Stealth) to create a new type of pocket TV.

At launch, the 3 Italia m-TV service offered 15 channels including interactive options like quizzes and voting. The number is expected to reach 40 by 2008. 3 Italia has found that the main users of DVB-H services are aged between 25 and 40 – a considerable proportion of the client base, the most popular channels being sports and news.

400,000 subscribers

3 Italia has found its experience very encouraging. The TV service took less than two months after launch to recruit the first 100,000 clients. By March 2007 the service had attracted over 400,000 subscribers, proving its success. Growth as rapid as this gives the lie to those cynical about the demand for TV via mobile phones. Moreover, two other Italian operators have now decided to follow 3 Italia’s example and join in this market too: Vodafone and TIM TV – proof if need be that the market is expanding. In fact, a recent study by Screen
Digest expects the world wide market for mobile TV to be worth €4.7 billion by 2011, with 140 million subscribers.

The benefit to 3 Italia has been to guarantee its position as leading mobile operator in the domain of multimedia and content. Through its acquisition of a broadcaster, it has been able to keep the cost of acquiring content down. Moreover, it has even been able to sell content on to other operators. Its involvement in creation, production and aggregation puts it in a strong position to negotiate deals for more content with third parties. Finally, the launch of mobile TV has led to an observable increase in AR PU, of between €5 and €10 a month.