With the deal, Ericsson said it would account for more than 25% of the IPTV and multi-screen solutions market, at a time when the global IPTV space is tipped to reach 76 million subscribers this year.
Microsoft said the deal would allow it commit 100% of its consumer TV strategy to its Xbox games console, which already acts as a gateway to web-powered video services.
Mediaroom powers entertainment services to TV, PC and mobile devices inside and outside the home. Microsoft claims the platform currently powers 22 million set-top boxes deployed in households across EMEA, the Americas and Asia Pacific. Operator partners that use Mediaroom include AT&T, Deutsche Telekom, Telus and Swisscom.
“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,” said Per Borgklint, senior VP and head of business unit support solutions at Ericsson.
Microsoft’s Mediaroom business is situated in Mountain View, California and employs more than 400 people worldwide. Ericsson plans to incorporate it into its Business Unit Support Solutions business.
Yusuf Mehdi, corporate VP of marketing, strategy and business for the interactive entertainment business at Microsoft said: “With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want – whether on a console, phone, PC or tablet.”
Mehdi added that Microsoft aims to partner with content creators, studios, labels, networks, content aggregators, operators and distributors in order to “deliver the next wave of innovation in games and consumer entertainment.”
The deal is expected to close during the second half of 2013 subject to regulatory approval. Reports first emerged claiming that Ericsson was in discussions with Microsoft over the Mediaroom business last month.