Expanding its broadband reach to the headend and to include cable operators, Ericsson has bid $1.2 billion for TANDBERG Television, a maker of video compression systems.
The move comes just weeks after Ericsson targeted Entrisphere Inc. and months after it went after broadband access vendor Redback Networks Inc. for $1.9 billion.
The deal, which comes on the heels of cable operator equipment provider Arris Systems Inc.’s $1.2 billion bid for TANDBERG, demonstrates the importance of video compression in IPTV ecosystems for service providers as it lets them to offer such functionality as high definition television without wasting bandwidth.
As for Ericsson, landing TANDBERG Television in addition to buying Redback (LINK-http://www.xchangemag.com/articles/539/6ch209575721019.html) would help it expand its landline video portfolio, which began in earnest well over a year ago when it acquired the broadband networking assets of Marconi.
Ericsson’s unsolicited bid is currently being reviewed by TANDBERG, the company confirmed Monday. Arris and TANDBERG Television announced on Jan. 15 that they have reached an agreement to combine the two companies through an acquisition of all outstanding TANDBERG Television shares by Arris.
That move “demonstrates ARRIS is finally making the huge, but logical, bet that the company is ready to compete long-term in the overall video and cable space as a major integrator partner that can compete with top-tier rivals such as Cisco and Motorola in an end-to-end solution sense,” according to Current Analysis experts.
“However,” the researchers cautioned at the time, “ARRIS still must prove it can successfully integrate an acquisition of this magnitude and show the price for TANDBERG TV was worth it.”
Cisco’s portfolio has been built largely through acquisition, featuring set-too boxes from Scientific Atlanta and home networking gear from Linksys Corp. Motorola provides in-home gear from its purchase of Netopia Inc. and STBs from Kreatel Communications.
Arris Systems Inc. www.Arris.com
Ericsson www.ericsson.com
Redback Networks www.redback.com
TANDBERG Television www.TANDBERG.net
