News's Sky Italia sees enormous room to grow - paper

MILAN (Reuters) - News Corp's satellite pay-TV unit Sky Italia sees enormous scope to grow its business and rejected talk of a war with its main rival, its chief executive said in a newspaper interview on Sunday.

This year has seen legal and antitrust allegations exchanged between Sky Italia and Mediaset SpA, which is owned by Italy's Prime Minister Silvio Berlusconi, as Mediaset increases its digital terrestial pay-TV services.

"It is true that, according to the press, Silvio Berlusconi has defined Sky as 'an enemy' and his son Pier Silvio (Mediaset vice-chairman) in the last few days has used the term war," Tom Mockridge said in Corriere della Sera.

"In reality, I continue to believe that you are dealing with only competition between two companies, of healthy competition on content, on offers, on business models," he said.

On expansion, the Sky Italia chief compared Italy pay-TV market penetration -- which the newspaper said is 25 percent -- to the 93 percent of U.S. families, 60 percent in Britain, and 50 percent in France.

"In Italy there is enormous space to grow," he said.

Sky has no plans to transmit its programmes on terrestrial digital TV networks because they lack sufficient capacity for its high definition channels but will look at expanding its broadband internet distribution, he said.

In a separate item in Sunday's Corriere della Sera Mediaset chairman Fedele Confalonieri said Sky Italia's offering has a "monopolistic" character keeping viewers tied to its platform compared to digital terrestrial rivals.

Confalonieri said "there is competition not war" with Sky.

(Writing by Nigel Tutt; Editing by Mike Nesbit)