Report: Ericsson readies bid for Microsoft's IPTV software unit

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Ericsson could acquire Microsoft's IPTV business within the next few weeks, according to a  Bloomberg report, which cited unnamed sources.

The two firms are holding talks which could result in the Swedish vendor adding IPTV technology and skills to its growing services business. The goal would be to help operators compete more effectively against cable, satellite and Web-based service providers.

"As a bolt-on acquisition, this would make sense for Ericsson as it provides for a more complete offering," Exane BNP Paribas analyst Alexander Peterc told Bloomberg. "Still, the technology started to get hyped about 10 years ago and may have reached its peak already so I don't see this as a growth market."

Both Microsoft and Ericsson declined to comment, according to Bloomberg.

Microsoft has been a leading promoter of IPTV over the past decade, with AT&T using Microsoft's Mediaroom IPTV technology as part of its U-Verse service, which combines TV with other telco services. AT&T had around 4.5 million U-Verse video subscribers at the end of 2012.

Ericsson has been making waves in the content and media market in recent months. In February the vendor unveiled a new unified content delivery network (CDN) solution called Ericsson Media Delivery Network. The solution uses Ericsson's advanced packet core and radio capabilities as well as intelligent content management capabilities. Ericsson said the CDN solution will let operator profitably deliver video and let content providers get guaranteed quality of experience across all networks.

Further, in January Ericsson acquired IT consultancy Devoteam's Telecom & Media operations in France. With the move Ericsson picked up 400 French-based consultants with expertise in IP multimedia subsystems, delivery platforms and radio/TV networks.

Separately, Ericsson said it has completed its planned job cuts of around 1,400 positions in Sweden; it said 919 employees have so far been notified of the cuts. The majority of the losses, will take place within the firm's networks division, although other areas of the organisation will also feel the impact of the cuts, Ericsson said.

The cuts, which were originally announced in November as part of the company's efforts to cut costs by around €180 million, will hit Ericsson's first-quarter results.

For more:
- see this Bloomberg article
- see this Ericsson release

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