Cut-price internet service provider TPG Telecom will take on Foxtel and FetchTV with its own premium television service from early 2015, setting up a three-way telco battle over how Australians tune in to their tellies.
TPG consumer business general manager Craig Levy told Fairfax Media the company had long owned the technology required to broadcast television over its internet services but lacked the content that customers demanded.
Internet-protocol television (IPTV) is an increasingly important service used by telcos to keep customers loyal to their brand. Foxtel is due to launch its own "triple play" in 2015 to boost customer numbers by selling pay TV, internet and phone services.
"TPG has been doing IPTV for more than five years now on our network using multicast technology and we have the underlying infrastructure to do it," Mr Levy said. "What we've always lacked is the content.
"Now we've secured premium content and that's something that will probably be part of a triple play."
The move will set up three main factions of internet service providers in the battle to control what people watch at home.
Telstra has found success by bundling products with Foxtel products while iiNet, SingTel-Optus and others use rival Malaysian-backed rival Fetch TV. TPG and its potential base of 748,000 broadband subscribers would stand alone.
But Mr Levy declined to reveal any details about the types of content, the pricing of services or the set top box due to be released in 2015.
"With the partnership that we've entered into, both parties need to consent to the specifics around it and at this stage it's a little bit early on," he said. "We're expecting it in early 2015 if everything goes to plan.
"What you've seen in the past is we try and maintain excellent value for money offerings amongst consumers so it can appeal to them. I can't see this being any different from what we've typically done in the past."
Mr Levy said TPG had the option of becoming a Fetch TV reseller but chose to offer its own products instead.
"When we looked at it it was very much a 'me too' type of proposition," he said.
TPG's purchase of AAPT for $450 million and ownership of Pipe Networks has given it an extensive amount of fibre optic cabling between buildings and cities, which in turn slashes the price of carry large amounts of data.
This can make it cheaper for TPG to offer data intensive services like IPTV to some of its customers.
Services that stream television over the internet are gaining traction in Australia with US streaming media giant Netflix rumoured to be launching its popular service in Australia in 2015. However, analysts have warned locals may not get access to the hit TV shows that have made it a success.
Channel Nine and Fairfax Media last month announced they were launching "StreamCo" to let customers watch video on demand for a fee.
TPG on Tuesday reported a solid 15 per cent increase in net profits to hit $172 million during financial year 2014. Revenues over the same period rose by 34 per cent to $970 million.
