Ericsson has made an offer to acquire the Broadcast Services Division of Technicolor, as it looks to make further inroads into the broadcast market, the company said on Tuesday.
Ericsson is paying €19 million (US$24.9 million), plus up to an additional €9 million, which will be dependent on how the unit performs in 2015, according to a statement from Ericsson.
For that investment Ericsson will get about 900 employees and TV distribution operations in France, the U.K. and the Netherlands, which will allow the Swedish telecommunications vendor to substantially increase its current broadcast operations, it said.
This is not a new area for Ericsson. The company has managed TV distribution for broadcasters in the Nordic region since 2007 and last year it signed a deal with MediaCorp in Singapore.
Today, TV distribution is separate from Ericsson's telecommunications equipment, but as those two areas converge, it will become an even more valuable asset for the company, according to a spokeswoman at Ericsson.
At Mobile World Congress, Ericsson and Qualcomm demonstrated a technology called evolved Multimedia Broadcast Multicast Service (eMBMS), which allows operators to use their LTE networks to distribute TV.
Ericsson contends that using LTE and MBMS will be more spectrally efficient than current broadcast technologies and networks, according to a paper published last year.
The acquisition of Technicolor's Broadcast Services Division is expected to close in the middle of 2012, according to Ericsson.