Ericsson makes broadcast play with Technicolor deal

Ericsson has agreed a deal to acquire Technicolor’s UK, France and Holland playout arm for £15.9m with a potential earn-out based on 2015 revenues of up to £7.5m.

The acquisition is a significant move into broadcast for the Swedish telecoms giant, which made its first steps into managed services for broadcast in 2009 when it signed a 10-year playout deal with Swedish broadcaster TV4 Group.

In January last year, Singapore’s MediaCorp selected Ericsson to manage its OTT service.

“We have conquered managed services in the telco space,” said Ericsson head of managed services Valter D’Avino.

“For telecom operators, we work to improve the customer experience and create synergies and efficiencies; if we combine the telecom networks we manage, we have 900 million subscribers and we use the same processes and tools for all of them.

“Broadcast is more of a one-to-one model and we would like to use the telco approach of a one-to-many model.”

“We believe the two worlds [of wireless and broadcast] are moving in the same direction, but what is important is the customer experience, and from the market’s viewpoint the two worlds will be converged.”

Key client

Technicolor’s key clients include ITV in the UK, Dutch national broadcaster NPO and Canal Plus in France, where the business is headquartered.

D’Avino described Technicolor’s deal with ITV as “very important”.

He said: “We are sure that now Ericsson is in this arena it will reinforce the level of trust that already exists with Technicolor, and we are confident we will be able to create more value through this deal.

“Our intention is to remain a fundamental partner and increase the amount of business we do with ITV.”

The deal, which is expected to complete mid-way through the year, will see 900 staff join Ericsson. D’Avino said it was too early to comment on redundancies.

“It is our intention to make the best use of those 900 people; those people have the fundamental competencies that we require. The only way to sell to other customers is to show we are credible and ready by showing them we have the people to do the job.”