Motorola plans to expand its range of digital television set-top boxes (STBs) with the acquisition of a Swedish specialist in IPTV (Internet Protocol television) equipment for an undisclosed sum.
Kreatel Communications AB develops and manufactures STBs for delivering digital TV over IP networks. Since moving into the market in 2000, it has won over telecommunication operators including Telefonica in Spain and TeliaSonera Sweden to its products, which run the Linux operating system.
Set-top boxes convert signals from a broadcast medium such as cable, satellite or DSL (digital subscriber line) into a form usable by a television set, and offer functions such as channel selection, electronic program guides, management of video-on-demand services or even, in the case of some Kreatel models, digital video recording.
Motorola already offers a range of STBs for cable TV services, but acquiring Kreatel will allow it to address the growing number of telecommunications operators using IPTV technology to deliver video signals over DSL connections, it said.
The Swedish company's expertise extends beyond the STB to encompass application and middleware, and the company offers integration services to network operator customers to ensure its boxes work with the services delivered. For its part, Motorola also offers products for distributing video from the "head end," the source of video signals in a network.
Kreatel has formed technology partnerships with other IPTV middleware, head end, network and video server developers including Alcatel, Concurrent Computer, Siemens and Tandberg Television.
Motorola and Kreatel executives were not available to say how those partnerships will be affected by the acquisition.
The IPTV industry is slowly consolidating into vertical stacks of software and hardware, from the head end to the living room, as larger companies take control of the many smaller innovators in the sector. Last April, Siemens bought IPTV middleware software vendor Myrio, and in November Cisco Systems bought cable STB maker Scientific-Atlanta for US$6.9 billion.
Microsoft too, is buzzing around the market. It has its own STB software platform, and last February struck a deal with French network equipment manufacturer Alcatel to put its software in Alcatel's IPTV delivery system.
Kreatel and Motorola expect to complete their deal by the end of March, subject to the usual closing conditions. If the deal goes through, Kreatel will become part of Motorola's Connected Home Solutions business unit, although its staff will continue to work at Kreatel's headquarters in Linkoping, Sweden.