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Ericsson LogoSwedish maker of telecommunications equipment Ericsson, has agreed to buy Microsoft’s Mediaroom business, which makes the software that powers AT&T’s U-Verse TV service, the companies said Monday. Neither company said how much Ericsson is paying.

Mediaroom gives phone companies a way to provide cable-like TV services over phone lines. It’s used in 22 million set-top boxes in 11 million households, Microsoft said. U-Verse accounts for about 4.5 million of those homes. It’s also used by Deutsche Telekom of Germany and by Telus Communications of Canada.

Microsoft Corp., which is based in Redmond, Wash., said it’s focusing its resources on making its Xbox service a delivery vehicle for entertainment to game consoles, phones, PCs and tablets. Ericsson said the Mediaroom business complements its portfolio of TV products. The business employs more than 400 people and is based in Mountain View, Calif.

The purchase of Mediaroom will make Ericsson the leading provider of IPTV and multi-screen solutions with a market share of over 25 percent, the telecom equipment giant asserts in a statement. The company further argues that the deal puts it in a lead position for ‘TV Anywhere’ consumption.

The acquisition is expected to close during the second half of 2013 and is subject to customary regulatory approvals and other conditions.

Per Borgklint, SVP and Head of Business Unit Support Solutions at Ericsson, said:

“Ericsson’s vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud. Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had. This acquisition contributes to a leading position for Ericsson with more than 40 customers, serving over 11 million subscriber households. In addition, Ericsson will be powered with senior competence and some of the most talented people within the field of IPTV distribution.”

Credit: TNW and IBNlive