Ericsson to acquire Microsoft TV unit

Swedish network infrastructure vendor Ericsson has acquired Microsoft’s TV solution Mediaroom for an undisclosed sum.

Mediaroom is the technology used by operators such as AT&T, Deutsche Telekom, Telefonica and Swisscom for their TV offerings. The technology is used on more than 22 million set top boxes worldwide.

According to Ericsson, which already has its own portfolio of IPTV and multi-screen solutions, the acquisition will provide it with more than 40 additional customers, serving over 11 million subscriber households, taking the Swedish firm’s global market share to over 25 per cent. The vendor will also acquire the expertise of more than 400 Mediaroom employees worldwide.

“Today there are one billion video enabled devices in the world, in 10 years there will be around 10 billion video enabled devices,” Per Borgklint, SVP and head of Business Unit Support Solutions at Ericsson told Telecoms.com.

“The amount of total video distributed over the network will probably account for around 99 per cent of traffic on the network. Video distribution technology will be core for our end users and for us.

He explained that as subscribers step up their consumption of mobile video content, they and operators in turn, will place more and more importance on how the video is delivered and quality of service. As an analogy, Borgklint compared the delivery of video to that of postal services.

“If you’re expecting something valuable in the post, such as Superbowl tickets, you obviously expect recorded delivery; for the package to be sent on time, in the right way, without disappearing on its route. The same goes for if you wanted to watch the Superbowl online using you mobile in your summer house. You will not be willing to pay for this unless you can be sure of the quality,” he said.

“Video will be as important to the mobile network as voice was 15 years ago.”

The global IPTV market is estimated to reach 76 million subscribers in 2013, according to Ericsson. The deal is expected to close in the second half of 2013, and builds on Ericsson’s work in the TV sector, for which it has won three Emmys.