Motorola to buy manufacturer of set top boxes

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Motorola , the US-based electronics group, is to buy Kreatel Communications, a Swedish manufacturer of advanced set top boxes designed to enable telecommunications and cable companies to deliver IP (Internet Protocol) – based TV and video services.

Kreatel’s customers include Spain’s Telefonica and TeliaSonera of Sweden.

The deal will bolster Motorola’s ability to compete in the emerging market for IPTV set top boxes and consolidate the Schaumburg, Illinois-based company’s position as the biggest set top box maker in the US.

It follows Cisco Systems’s decision to move into the consumer set top box market through the proposed acquisition of Scientific-Atlanta for $6.9bn.

In the US and elsewhere telecommunications carriers including Verizon Communications and AT&T are moving towards offering video and other advanced services over new fiber optic-based networks.

They see this an essential part of their strategy to compete against the cable operators which are ramping up their efforts to sell Internet telephony services as part of a ‘triple play’ bundle of services to consumers.

Motorola did not disclose the financial terms of the Kreatel deal but said it expects to complete the acquisition during the first quarter. Kreatel had sales of Kr134m in 2004 and employs 60 people.

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