Ericsson to acquire Microsoft's IPTV unit

Swedish telecommunications equipment maker Ericsson AB said on Tuesday it will acquire Microsoft Corp's Internet protocol television unit Mediaroom.

Ericsson AB's pavilion at the Mobile World Congress in Barcelona, Spain, in February. Analysts say the company's latest move to buy Microsoft Corp's Mediaroom will help Ericsson further explore the Chinese market. [Provided to China Daily]

While analysts said the move will help Ericsson further explore the Chinese market, concerns were expressed among Mediaroom's employees in China.

"The acquisition will help us further integrate technology resources and enrich our production line," said Gao Junliang, vice-president of Ericsson China and director of the company's broadcasting and new media department.

Gao said acquiring Mediaroom was a part of Ericsson's overall strategy in the broadcasting sector, and the company has high expectations for the sector.

"We hope the China market will register a high growth rate in the future," he added.

The acquisition is due to be completed in the second half of this year.

After the acquisition, Ericsson will become the top player in the IPTV sector, with a global market share of more than 25 percent, the company said.

Currently, Mediaroom powers 22 million set-top boxes in 11 million subscriber households worldwide, said a separate statement from Microsoft.

"With the sale of Mediaroom, Microsoft will dedicate all its TV resources to Xbox," said the United States-based company.

Overseas IPTV providers have a limited presence in emerging markets, including China.

Mediaroom's market share in China was "next-to-nothing" because the product only targets high-end customers, according to Zhang Fan, a researcher at Beijing-based Internet consultancy Analysys International.