Ericsson Buys Microsoft's IPTV Unit

Following weeks of speculation, Ericsson AB has confirmed a deal to acquire Microsoft Corp.'s Mediaroom IPTV business unit, a move the Swedish vendor claims will give it a market-leading 25 percent share of the IPTV and multi-screen solutions sector. (See Euronews: Will Ericsson Buy Microsoft's IPTV Biz?)

Financial details were not disclosed but Light Reading understands that the agreed price is more than US$100 million and may even be as high as $230 million. And while Ericsson describes the Mediaroom business, which has more than 40 customers, as "healthy," there are no details about the impact it will have on the revenues and margins of Ericsson's Support Solutions business unit, which already houses its extensive video networking and management product lines.

Mediaroom's customer list includes AT&T Inc. (for U-verse TV), Deutsche Telekom AG, Swisscom AG, Telefónica SA and Telus Corp.

Ericsson signaled its intent to be a major supplier of video capabilities to service providers when it snapped up Tandberg TV in a deal valued at $1.4 billion. (See Ericsson Offers $1.4B for Tandberg TV.)

Now, seven years later, the video services market has evolved in Ericsson's favor, with a much greater emphasis on enabling multimedia services over fixed and particularly 3G and 4G wireless networks, its core expertise. As a result, with Mediaroom on board, Ericsson believes it will be well placed to dominate the market for so-called 'TV Anywhere' (an Ericsson term for 'TV Everywhere') video hardware, software and applications. (See Ericsson Launches Video Over LTE System and TV Everywhere Faces Fragmentation Challenge.)

— Ray Le Maistre, Editor-in-Chief, Light Reading