Telefonica this week rejected claims by rivals that its involvement in pay-television was merely a defensive tactic designed to reduce customer churn in its core fixed-line telephony business. The Spanish incumbent telecommunications operator said that it was confident that its content operations were capable of being growth drivers in their own right. Telefonica estimates that its worldwide television subscriber base will reach "no less than five million by 2010", up from 1.3 million at the end of June 2007. The forecast was given by Antonio Schuh, director of planning and analysis for Telefonica's content division, at this week's European Media Leaders* Summit, organised by Informa Telecoms & Media, publisher of New Media Markets, and the PwC consultancy. The target includes Telefonica's divisions in Latin America, where the company offers pay-television via satellite, cable and wireless as well as IPTV, but Schuh stressed that he expected "a heavier emphasis on IPTV in the mix". He admitted that "IPTV and cash-flow don't mix very well in the beginning", not least because of minimum-revenue guarantees in deals with the major Hollywood studios. Telefonica would reach the necessary scale for these deals to become profitable in the middle of next year, said Schuh.
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