Ericsson to acquire Microsoft Corp's Mediaroom IPTV business

Ericsson, the world's largest maker of telecom equipment, today said that it would buy Microsoft Corp's Mediaroom IPTV business, which is used by phone companies such as AT&T to deliver television over the Internet.

The Stockholm-based company did not reveal the financial terms of the deal, but said that the deal would make the company, the leading provider of IPTV and multi-screen solutions with a market share of over 25 per cent.

Launched in 2007, Microsoft's Media Room is an end-to-end internet protocol television (IPTV) platform that enables pay TV operators to deliver TV services to multiple screens and connected devices.

The services can be delivered to the consumers on a range of devices inside and outside the home, including wired and WiFi set top boxes, Xbox 360, PCs, tablets, smartphones and other connected devices -over both operator's managed IP networks as well as Over The Top unmanaged networks.

Mediaroom is used by the world's leading television service providers like AT&T, Deutsche Telekom, Telefonica, TELUS Optik TV and Swisscom.

As of November 2012, Media Room had more than 22 million set-top boxes deployed in more than 11 million households through 40 of the world's leading operators, making it the largest deployed commercial IPTV middleware platform with a 23 per cent global market share.

Ericsson said that the global IPTV market is estimated to reach 76 million subscribers in 2013 with revenues of $32 billion, growing to 105 million subscribers and $45 billion in 2015.

Per Borgklint, senior vice president and head of business unit support solutions at Ericsson said, "Ericsson's vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud. Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had. Ericsson will be powered with senior competence and some of the most talented people within the field of IPTV distribution."

Microsoft will now focus on Xbox for entertainment apps by building a "Cloud TV" platform. "With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox," read a statement from Microsoft's official blog.