Ericsson is reportedly planning on buying out Microsoft’s Internet Protocol Television (IPTV) service. The service, called MediaRoom, allows many operators to bring their paid-TV service to a variety of devices, including smartphones, tablets, computers, as well as video game consoles. If Ericsson successfully purchases the service, it would have another great weapon in its arsenal of software services.
Sources have told Bloomberg that the deal may be announced in a few weeks. After Microsoft sells off MediaRoom, it will focus most of its efforts on bringing TV services to Xbox LIVE. Microsoft has already signed some good distribution deals for Xbox LIVE, including ESPN and Viacom (which offers Xbox several TV shows from channels such as Nickelodeon, BET, VH1, Spike, and more).
Microsoft’s IPTV service is a great way for telecom carriers to offer voice, broadband, and TV bundles. AT&T takes advantage of Microsoft’s IPTV service with its U-Verse offering. It currently has over 4.5 million U-Verse video subscribers. IPTV services allow telecom companies like AT&T to better compete with video-streaming services like Netflix, as well as cable companies like Comcast.
Ericsson is currently the world’s largest creator of equipment for mobile telecommunications networks, but as competition in the hardware-sector of the business is getting more fierce, it wants to place some of its eggs into the software-side. It’ll be interesting to see what Ericsson plans on doing with MediaRoom, but some believe it won’t be rewarding acquisition. Alexander Peterc, an Exane BNP Paribas analyst, stated, “The technology started to get hyped about 10 years ago ad may have reached its peak already so I don’t see this as a growth market.”