Telekom Austria said this week that initial take-up of its IPTV service had been stronger than expected and that it now hoped to reach between 80,000 and 100,000 subscribers by the end of the year, compared with earlier forecasts of 50,000.
AonTV, which launched commercially in September 2007, is adding new subscribers at an average rate of 1,000 a week and had about 30,000 subscribers by mid-February.
"The response has been very, very good," said Rudolf Fischer, deputy chief executive of Telekom Austria. "Consumers are starting to see AonTV as a real alternative to other television services."
Fischer said he believed that AonTV's video-on-demand library had played a key role in differentiating the service from that of rival cable and satellite operators.
Last November, Telekom Austria struck a deal with On Demand Deutschland (ODD), a joint venture between On Demand Group and German production and distribution company Tele München, to offer up-to-date and higher-quality films.
AonTV's subscribers can access about 500 video-on-demand titles, priced at between E1 (US$1.52) and E5 each. The company plans to increase the library to 1,000 titles by the end of the year.
Fischer said that AonTV had started adding films from ODD to its line-up five weeks ago and that this had already had a palpable effect on usage. Films shown include Shrek the Third and Shooters.
"Ever since we've started switching to ODD titles, on-demand growth has been up 30 to 40 per cent," he said, adding that about 25 per cent of AonTV's 30,000 subscribers had now used the on-demand service.
The company expects to increase further the attractiveness of its on-demand library by gaining access to films "just one or two weeks after the DVD release" in the near future, Fischer said.
AonTV also aims to increase the number of linear channels it carries from 80 to more than 100 by the end of the year and plans to add a string of ethnic channels as well as German film channel Kinowelt over the next few months.
It offers three channel bouquets - Basic, Premium and Best Of - with prices starting at E4.90 a month, on top of monthly fixed-line rental of at least E15.98. About 35 per cent of subscribers take the Premium package.
Telekom Austria last week posted its first drop in net profits since making its debut on the Vienna stock market in 2000, reporting a 12.3-per-cent year-on-year decline to E492.5 million. Ebit was down two per cent to E761.4 million, compared to E777.1 million in 2006, while revenue was up 3.3 per cent to E4.9 billion.
The company's share price dropped by 10.61 per cent to E15.42 after the company announced that it expected net income to fall by 12 per cent in 2008, blaming a recent increase in interest rates.
