An insider leaked information that Ericsson, the giant in wireless networks, is preparing to acquire Microsoft IPTV business. If both parties reach an agreement, the deal might be announced in a few weeks, according to the insider source, who asked for anonymity.
Microsoft’s IPTV business, also known as Mediaroom is the most widely deployed commercial IPTV media platform reaching more than 11 million subscribers through more than 40 global Operation partners at the close of 2012. According to Raymond James & Associates, Media Room has been having an annual turnover of $350 million for the past three years and could sell for more than $1 billion should Microsoft decide to sell.
Ericsson’s interest in Microsoft’s IPTV business is due in part to its aim to aid network carriers that are competing with satellite, cable and other Web-based providers. IPTV technology helps telecom carriers bundle voice, broadband and TV products that can compete with cable companies and web-delivered services. Ericsson is planning to put more emphasis on their software and wireless services, which is why acquiring Microsoft’s IPTV business is a big step towards that general direction.
Alexander Peterc, an analyst at Exane BNP Paribas commented on this alleged move of Ericsson to acquire Mediaroom, saying “This would make sense for Ericsson as it provides for a more complete offering.“ He said that he is not entirely convinced with IPTV as a growing market and expressed his opinion that it might already have reached its peak since it was first hyped 10 years ago.
Pyramid Research’s analyst Guillermo Hurtado has a more positive pronouncement; however, foreseeing that this year more than 100 million will get TV service through IPTV from partner phone companies, with most of the growth forecast coming from China and Japan.
Microsoft is rumored to have shifted its focus in the last few years into further developing its Xbox game consoles and concentrating on delivering TV entertainment and other media services through it. Xbox 720, Microsoft’s latest game console, is said to hit the market at the beginning of the Christmas season.
It seems that Ericsson and Microsoft are both going for what they want. Ericsson will have a lot to gain by acquiring Mediaroom, and Microsoft will be able to focus more on their Xbox game console.
Spokeswoman for Ericsson, Yvonne Edenholm, refused to comment when asked if the rumors floating are true, as did Melissa Havel, Redmond’s spokeswoman.