Dow Jones Real-Time News for InvestorsSM 06:26 a.m. 12/16/2005
The move by Switzerland's largest cable television provider is part of its drive to offer the so-called quadruple play, combining fixed line telephone, mobile, high-speed Internet and television. It's the first player in Switzerland to offer such a service.
European cable operators are trying to bolster their products and defenses against telecoms operators, which are moving increasingly aggressively into the TV arena. U.K. cable provider NTL Inc. (NTLI) last week bid for mobile service provider Virgin Mobile Holdings PLC (VMOB.LN).
Cablecom has indicated it will eventually launch a service that offers mobile calls over the Internet at home for a flat rate, with an agreement with a network operator for coverage outside of the house.
The Swiss mobile sector is still dominated by Swisscom, which over 4 million customers and a market share of more than 60%.
Swisscom rivals Sunrise and France Telecom SA's (FTE) Orange have embarked on a round of price cuts this year in a bid to capture more of the market. Several mobile resellers, including retail giants Migros-Genossenschafts-Bund (MGB.YY) and Coop Schweiz (CSB.YY), entered the fray in late summer.
Cablecom said its first mobile offering would be some 20% cheaper than competitors'.
The move "will likely shake up the lower end of the mobile phone market in particular," said Panagiotis Spiliopoulos, an analyst at Bank Vontobel.
"The enterprise segment will remain the domain of Swisscom," Spiliopoulos said. "But Cablecom can bundle several of its services and really heat up competition in the consumer segment, where we could see some swings in market share in the coming quarters." He rates Swisscom shares underperform.
At 1120 GMT, Swisscom shares were trading up CHF1, or 0.2%, at CHF412.
Cablecom was bought in early October by Liberty Global for CHF2.83 billion, just one day after the Swiss company had announced details to list shares on the stock market.
Swisscom, meanwhile, suffered a major setback in its expansion plans last month after the Swiss government - its majority owner - said it would block any foreign forays until it has pared its stake. "Swisscom's current predicament might have something to do with the timing of Cablecom's announcement," Spiliopoulos said.