Verizon continues video buying spree with Intel deal

The operator plans to integrate IP-based TV services with FiOS video

Verizon Communications has signed a deal to acquire the assets of Intel Media, developer of the OnCue Cloud TV platform, as it looks to further strengthen its video offering across mobile and fixed networks.

Telecommunications operators around the world are looking for new revenue streams as traditional income sources, including voice calls, have come under increasing pressure. The growth of online video seems to have really caught the imagination of Verizon's executives, as this is the third related acquisition since the middle of November.

The terms of the deal were not disclosed, but it is expected to close early in the first quarter, according to Verizon.

What Verizon gets is the intellectual property rights and other assets that powered Intel's OnCue Cloud TV platform. About 350 employees are also part of the deal. Once the transaction is closed, Verizon will integrate IP-based TV services with FiOS video, it said. Verizon's ultimate goal is to let subscribers watch content at any time on any type of device over both fixed and mobile networks. The operator also wants to improve search and discovery features, it said.

Prior to the Intel Media deal, Verizon also acquired EdgeCast Networks in December and the assets of upLynk in November.

With the EdgeCast acquisition, Verizon gets a content delivery network, a global network of servers that can be used to handle traffic spikes, stream content to thousands of viewers concurrently, or secure websites from attacks, according to EdgeCast.

Verizon's Digital Media Services unit will use those capabilities to further improve "ability to meet the exponential growth in online digital media content, as well as broaden its portfolio of site acceleration services for enterprises," Verizon said at the time.

The technology from upLynk simplifies the process of uploading and encoding live, linear and on-demand video content, according to Verizon.

Online video is already the biggest contributor to mobile traffic volumes, representing 25 percent of total smartphone traffic and 40 percent of total tablet traffic, according to a recent report from telecommunications equipment vendor Ericsson.

Increased smartphone use is the main driver for mobile-data traffic growth in the coming years, but users consuming more data -- again, mainly driven by video -- is adding to this. Ericsson expects data traffic to grow at a compound annual growth rate of around 45 percent between 2013 and 2019, or by a factor of 10 during the whole period.

Beyond video, operators are also showing more interest in gaming.

Earlier this month, French network operator Orange acquired a minority stake in the Japanese company G-cluster Global, as it looks to accelerate its mobile gaming push. Also, in October last year, Japanese carrier SoftBank announced that it was investing over US$1 billion in Finnish game developer Supercell.

Send news tips and comments to mikael_ricknas@idg.com

Tags business issuesconsumer electronicsTVsintelMergers and acquisitionsVerizon Communications

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Mikael Ricknäs

IDG News Service

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