Ericsson is in talks with Microsoft to acquire its IPTV business called ‘MediaRoom’, which develops software that allows phone companies to provide television service over the Internet.
According to Bloomberg, the transaction between the two companies is expected to be announced in the coming weeks.
The deal would help Ericsson in providing services to phone companies that are competing with cable, satellite and web-based providers.
For the past three years, MediaRoom’s annual sales came to about $350m and according to estimates the business is expected to generate over $1bn in the future.
Microsoft on the other hand is planning to focus on delivering TV service through its Xbox games console.
IPTV utilises the same technology that powers the Internet to broadcast multimedia content over telecom and cable networks and by leveraging IPTV technology, telecom companies will be able to provide voice, broadband and TV products that can compete with cable companies and web services like Netflix.
According to estimates about 100 million people are expected to receive TV service through IPTV from phone carriers by the end of 2013, which is an increase from 46 million in 2010.
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By 2017, the number of subscribers using the technology will rise by 17% per year, while revenue is expected to increase about 16% to $44bn over the period.
