atellite. Canal+ introduced their line of satellite services in April of 1998, called Canalsatellite Numerique Service. This system allows you to connect directly to the satellites thus eliminating the need to build large transmission stations. TV networks and Internet content providers can therefore broadcast information at much lower costs. The demand for satellite communications is growing very rapidly. We know that at present, 1.3 million of the (under) 20 million households have either cable or satellite services. This industry is very consolidated because it is such a new market; the threat of entrants is very high. Competition is likely to increase in this industry due to the increase in demand for advanced technology.SET TOP BOXWe have only seen one company who is offering a product similar to WEBTV, called PLAYWEB. This is a set top box that is offered by Telecom Italia. Telecom Italia provides the service and also sells the set top box. We were unable to obtain information on what the current demand is for such product. The growth rate in set top boxes is unpredictable at this time. The demand for Internet and e-mail services is suppose to increase by 210%, therefore increasing the demand for Internet/E-Mail access products. We don’t see this as a threat to Philip’s. The market is new and Philip’s name has been established. The Italians that are loyal to Philip’s brand are more likely to buy a set top box made by them over another company like SONY.MOBILE PHONEThe mobile phone industry has proven to be very popular in Italy, with over 14 users per 100 inhabitants, with a total number of 8.2 million subscribers. This should rise to over 30 users per 100 inhabitants in 1998, reaching target penetration in the year 2000 at 40 users per 100. There are over 300 companies who provide mobile services in Italy. The two major companies are Telecom Italia SpA and Omnitel Pronto Italia. Omnite...
