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Ericsson To Buy Microsoft's Mediaroom IPTV

Communications services provider Ericsson plans to acquire Microsoft's Mediaroom IPTV platform.

The two companies announced the deal yesterday, which is subject to regulatory approvals. Microsoft's Mediaroom IPTV platform is used by more than 40 operators around the world to deliver video services. It's used for paid TV services by AT&T's U-Verse service, Deutsche Telekom's Entertain, Telus' Optik TV, as well as by Swisscom and Telefonica, among others. Microsoft indicates that the platform supports 22 million TV set-top boxes today.

Microsoft is selling Mediaroom to focus on its Xbox gaming console as an entertainment hub, according to an announcement attributed to Yusuf Mehdi, corporate vice president of marketing, strategy and business for Microsoft's Interactive Entertainment Business.

"With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want -- whether on a console, phone, PC or tablet," Mehdi stated in the announcement.

Microsoft has distributed 76 million Xbox 360 consoles and counts 46 million Xbox Live subscribers. Mehdi credited the Mediaroom team with pioneering streaming IPTV video for limited bandwidth connections. The Mediaroom group is based in Mountain View, Calif., with more than 400 employees worldwide.

Ericsson expects to profit from growing smartphone use as IPTV goes mobile with the buildout of LTE wireless networks.

"Ericsson's vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud," said Per Borgklint, senior vice president and head of Business Unit Support Solutions at Ericsson, in a released statement. "Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had."

Ericsson expects to gain a market share of more than 25 percent in the IPTV space with the acquisition. The deal is expected to close in the second half of this year. Terms weren't announced.

About the Author

Kurt Mackie is senior news producer for the 1105 Enterprise Computing Group.

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