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updated: 4/8/2013 10:11 AM

Ericsson to buy Microsoft's Mediaroom television-software unit

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Bloomberg News

Ericsson AB agreed to buy Microsoft Corp.'s Mediaroom business, adding software used by phone companies to deliver television over the Internet.

Mediaroom, based in Mountain View, California, has more than 400 employees globally and will help Ericsson be the largest provider of IPTV technology, with a market share of over 25 percent, Ericsson said today in a statement. The value of the deal wasn't disclosed.

Ericsson, the largest maker of wireless networks, is seeking to cater to carriers that are competing with cable, satellite and Web-based providers. The move will also help Stockholm-based Ericsson step up its emphasis on software and services amid accelerating competition in hardware.

The global IPTV market is estimated to reach 105 million subscribers in 2015, expanding to $45 billion by that year from $32 billion in 2013, Ericsson said. The deal is expected to close in the second half of this year.

Ericsson advanced 0.3 percent to 77.80 kronor at 3:39 p.m. in Stockholm. Microsoft declined 0.2 percent to $28.64 in New York.

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