Telecom equipment maker Ericsson said on Monday it had struck a deal to buy Microsoft Corp's Mediaroom IPTV business, which makes software used by phone companies to deliver television over the Internet.
Ericsson (Stockholm, Sweden) said in a statement the deal would make the company, the world's biggest mobile networks maker, the leading provider of IPTV.
The company, which did not disclose the purchase price, said it expected to close the deal during the second half of 2013. Mediaroom is situated in Mountain View, California and employs more than 400 people worldwide, it added.
Internet protocol television (IPTV) uses the same technology that powers the Internet to transmit multimedia content over telecom and cable networks. Ericsson wants to cater to phone companies that are competing with cable, satellite and web-based media providers.
"This acquisition contributes to a leading position for Ericsson with more than 40 customers, serving over 11 million subscriber households," said Per Borgklint, Ericsson Senior Vice President and Head of Business Unit Support Solutions.
Ericsson said the global IPTV market was estimated to reach 76 million subscribers in 2013 with revenues of $32 billion, growing to 105 million subscribers and $45 billion in 2015.
The deal was subject to regulatory approvals and other conditions, it added.
(Reporting by Niklas Pollard; Editing by Helen Massy-Beresford)