It's official: Ericsson to acquire Microsoft's IPTV business

Ericsson (Nasdaq: ERIC) is making a formal move to acquire Microsoft's (Nasdaq: MSFT) Mediaroom IPTV business, giving it a 25 a percent market share in the IPTV market segment.

The announcement confirms rumors that emerged March 28 in a Bloomberg report citing "people with knowledge of the matter" that the Swedish company was negotiating a deal to buy Mediaroom.

Per Borgklint, senior vice president and head of business unit support solutions for Ericsson, said that by acquiring Mediaroom, the company "will add over 40 customers, serving over 11 million subscriber households."

Having a strong foothold in the mobile and wireline markets worldwide, Ericsson will be able to market its expanded IPTV product portfolio to existing telco customers such as AT&T (NYSE: T) U-verse and over-the-top providers like Netflix (Nasdaq: NFLX) and Amazon (Nasdaq: AMZN).

Purchasing Mediarooom has its challenges, however. Although Mediaroom has been a flagship IPTV platform, BT (NYSE: BT) last year replaced it with Comcast's (Nasdaq: CMCSA) thePlatform in mid-March to drive its BT Vision and YouView IPTV services.

Regardless of its loss of BT, Mediaroom is still the middleware platform of choice for over 40 large telcos, including AT&T, Deutsche Telekom, Telefonica, Telus (Toronto: T.TO) and Swisscom. In total, Mediaroom TV services are offered on over than 22 million set top boxes deployed in three key regions: the Americas, EMEA and APAC. It also has gained favor in tier two telcos such as TDS Telecom (NYSE: TDS), which replaced its Minerva platform with Mediaroom in January.

Set be closed in the second half of this year, when Mediaroom will be incorporated into Ericsson's Business Unit Support Solutions.

For more:
- see the release

Special Report: The top wireline mergers & acquisitions in 2012

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