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Ericsson reportedly in talks to buy Microsoft’s IPTV business

Swedish telecoms equipment vendor Ericsson is in talks to buy Microsoft’s IPTV business, and a deal could be announced within a few weeks, according to reports in Bloomberg quoting people with “knowledge of the matter”.

Microsoft’s IPTV unit is responsible for the Mediaroom middleware platform, used by some of the world’s biggest IPTV providers, including AT&T in the US, Telus in Canada and Germany’s Deutsche Telekom.

With 44 Mediaroom deployments in 21 countries around the world, serving more than 11mn households, Microsoft was recently estimated to control around a quarter (23%) of the world’s IPTV middleware market.

Off the pace

Speaking to us this morning, Rob Gallagher, Principal Analyst and Head of TV & Broadband Research at Informa Telecoms & Media (publisher of IP&TV News), observed that there has been a sense for a while now that Mediaroom has not kept pace with the rapid rate of change in the TV market, particularly in regards to multiscreen and over-the-top services.

Rob Gallagher, Informa Telecoms & Media

Rob Gallagher, Informa Telecoms & Media

“Although an acquisition would give Ericsson access to a very large base of some of the world’s largest telecoms operators, those companies are in most cases using the Mediaroom technology in tandem with a number of other platforms in order to support multiple devices and over-the-top services,” said Mr. Gallagher.

“This deal would give Ericsson access to that customer base, but then there is the question of how they integrate that with their wider offering, and build on it. Mediaroom’s subscriber figures do also need to be put into context – like most IPTV platforms, they are pretty low in the wider scheme of things.”

Mediaroom’s diminished USP

The Informa analyst finished by saying that one big issue for Microsoft is that Mediaroom’s original Unique Selling Point (USP) – the potential for integration with other Microsoft platforms like the PC and mobile operating systems – has somewhat diminished as the world has got a bit more complex and diverse.

The biggest deal signed most recently for Mediaroom came from Spanish telco Telefónica, which wants to use the IPTV middleware for its new Global Video Platform, designed to deliver IPTV and over-the-top video services over a unified backend in all countries in which it operates TV.

Via Bloomberg

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