Ericsson has reached an agreement with Microsoft to acquire its Mediaroom business in a deal estimated to be worth between $100 million and $234 million.
The announcement follows several few weeks of speculation. The acquisition of the middleware and operating system used by clients including Deutsche Telecom, BT and AT&T U-verse will bring Ericsson’s marketshare as a provider of IPTV and multiscreen solutions to over 25%. Closing of the deal is expected during the second half of 2013. Mediaroom is situated in Mountain View, California and employs more than 400 people worldwide.
“Ericsson’s vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud,” said Per Borgklint, SVP and head of business unit support solutions at Ericsson, in a statement
“Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had. This acquisition contributes to a leading position for Ericsson with more than 40 customers, serving over 11 million subscriber households. In addition, Ericsson will be powered with senior competence and some of the most talented people within the field of IPTV distribution.”
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.
“We are proud of the number one IPTV market position that we have achieved with Mediaroom. Ericsson’s complementary portfolio of TV and networking services will help drive the future growth and development of Mediaroom,” said Tom Gibbons, corporate VP, Microsoft Corporation.
“Ericsson is positioned to be a valuable strategic partner for operators and TV service providers around the world as the IPTV market evolves.”
The sale of Mediaroom marks the end of another chapter in Microsoft’s ambition to enter the TV space that had been preceded by the WebTV venture.
