Microsoft has sold its Mediaroom IPTV platform to Ericsson in order to solely focus on the Xbox. For Ericsson, the deal will make it the largest provider of "IPTV and multi-screen solutions," it said on Monday.
The two companies didn't announce any financial details, but the deal is expected to be completed during the second half of the year.
With the sale of Mediaroom, Microsoft will be dedicating all remaining TV resources to the Xbox as well as connected smartphones, PCs and tablets, the company said in a blog post. The company is looking to partner with content creators, studios, labels, networks, content aggregators, operators and distributors. The fact now that it no longer has conflicts of interest with operators that use the Mediaroom platform will give it more freedom.
Ericsson will get a middleware platform that is used to distribute TV to 11 million households, delivered by the likes of AT&T, Deutsche Telekom and Telefónica. Mediaroom can distribute live, recorded, and on demand programming to TVs, PCs and mobile devices.
The Swedish telecommunications vendor may be more well-known for its mobile networks, but it has been expanding its TV offerings, thanks to several acquisitions.
The deal comes as the broadcasting world is gathering in Las Vegas for the NAB Show to discuss the changing nature of TV and content distribution. At the show, Ericsson will debut the newly-formed Ericsson Broadcast Services division, which builds on its acquisition of Technicolor's Broadcast Services division.
On Friday, it was also announced that Korea Telecom will work with Ericsson to test Ultra-High Definition TV—or 4K—and High Efficiency Video Coding (HEVC). The latter is a compression technology that promises to reduce the bandwidth requirements for video delivery by over 50 percent compared to the best H.264/MPEG-4 AVC implementations, according to Ericsson, which last year launched a TV encoder compatible with the technology.
Global IPTV subscriptions stood at 84.3 million at the end of 2012, an increase of 32 percent compared to the prior year, according to Pyramid Research. This year it will pass the 100 million mark and by 2017 there will be 181.1 million subscribers worldwide, it said.