A fortnight after rumors surfaced hinting that Ericsson was lobbying to buy Microsoft's Mediaroom IPTV unit, both companies have announced that a deal has been signed. Microsoft VP Yusuf Medhi blogged that as the Xbox has become the heart of Redmond's home entertainment strategy, Mediaroom has become a resource-hogging distraction. The Mountain View-based IPTV outfit powers AT&T's U-Verse as well as similar VOD services from companies like Deutsche Telekom and Telefonica, and will be folded into Ericsson's Business Support Solutions outfit. The deal's expected to close in the second half of the year, with neither company talking about how much the sale cost.
Ericsson to acquire Microsoft Mediaroom
April 8, 2013, 15:00 (CEST)
Underlines Ericsson's commitment to being partner of choice for Video distribution across multiple networks and devices
Places Ericsson in lead for TV Anywhere consumption
Ericsson becomes leading player for innovative video distribution with combined market share of more than 25%
Ericsson (NASDAQ:ERIC) has reached an agreement with Microsoft (NASDAQ:MSFT) to acquire its TV solution Mediaroom business. This will make Ericsson the leading provider of IPTV and multi-screen solutions with a market share of over 25%. Closing expected during the second half of 2013. Mediaroom is situated in Mountain View, California and employs more than 400 people worldwide.
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. 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 BUSD, growing to 105 million subscribers and 45 BUSD in 2015.
"Mediaroom is the leading platform for video distribution deployed with the world's largest IPTV operators. This strategic acquisition positions Ericsson as an industry leader thanks to the skills and experiences of the talented people of Mediaroom combined with Ericsson's end to end service capabilities" Borgklint concluded.
The total media solution portfolio of Ericsson in the TV and video space combined with a further increased focus on consumer needs will be the foundation for providing services to end users. The importance of video distribution capabilities for the customers and their consumers will be increasing as more and more LTE networks are deployed and filled with smartphone users.
"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 Vice President of 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."
Microsoft Mediaroom is the TV technology behind many of the world's leading television service providers like AT&T U-verse®, Entertain of Deutsche Telekom, Telefonica, TELUS Optik TV(TM) and Swisscom. Mediaroom-powered TV services are offered on more than 22 million set top boxes deployed throughout the Americas, EMEA and APAC.
Ericsson already sees that the ever-changing behaviors of TV consumers are evolving faster than ever. Speed of innovation and intelligent solutions drive consumer propositions in TV anywhere. This development will continue to fuel the industry as convergence becomes reality. The development requires content owners, broadcasters, TV service providers and operators to re-think their propositions.
This move builds on Ericsson's triple Emmy award-winning leadership in the media industry, providing its customers with a truly unique experience in TV anywhere spanning the entire media value chain from camera to consumer.
The agreement is subject to customary regulatory approvals and other conditions. Mediaroom will be incorporated into Business Unit Support Solutions.