Verizon has agreed to acquire from Intel the assets of Intel Media, the company’s online TV service.
Intel hopes this transaction will advance online TV availability by integrating with Verizon’s FiOS fiber service and extending over the top to mobile devices. The financial details of the deal were not disclosed.
Verizon is buying the intellectual property rights and other assets for Intel's OnCue Cloud TV platform. Verizon plans to employ about all of the 350-person Intel unit, which stay in Santa Clara and keep its current management team.
Verizon’s wish to retain the OnCue team comes as good news at a time when Intel recently announced its intent to cut more than 5,000 jobs in 2014.
A giant chipmaker in the world of personal computers, Intel managed to maintain relatively flat income and revenue in its recently reported fourth quarter even as the PC market continues to sink. Intel has begun to shift its focus away from making chips for PCs and toward manufacturing the smaller chipsets needed for mobile devices, a move that’s negatively impacted the company’s sales.
For Verizon, the carrier gains more momentum for cloud-based TV services. Verizon CEO Lowell McAdam has repeatedly emphasized the important role video will play in next-generation mobile networks. He said that Verizon is thinking about 5G technology in order to keep up with the capacity demands streaming video puts on mobile networks. Verizon, ostensibly the first U.S. nationwide carrier to complete its LTE network buildout, has also become the first carrier to experience issues with handling capacity on its LTE network.
But Verizon has admitted to the network congestion and is looking to flush out its spectrum portfolio with higher-band airwaves to handle the extra traffic. Any network issues haven’t seemed to slow the telecom, as Verizon today managed to beat the Street on both earnings per share and revenue for its fourth quarter.
Regulatory approval and closing conditions pending, the Intel deal is expected to close early in the first quarter of 2014.