The world's largest software maker,
Microsoft Corp.
(
MSFT
) signed a multiyear agreement with
Telefonica Brasil
, S.A.
(
VIV
) to create a new Global Video Platform (GVP). The GVP will be
based on Microsoft's Mediaroom platform, created for video
entertainment services. The first deployments will be in Brazil,
Chile and Spain.
Mediaroom is the latest version of the Microsoft IPTV Edition
platform Software. The platform makes TV viewing more flexible in
that programs may be accessed from TVs via set top boxes, as well
as Microsoft-driven products such as Xbox360s, Windows PCs; Web
browsers via Microsoft Silverlight, Windows-based smartphones and
tablets.
Being one of the more significant telecommunication companies,
Telefonica has increased its focus on the digital segment. It has
been expanding its scope beyond traditional voice and messaging
services to live video. In October 2012, it announced the
acquisition of San Francisco-based TokBox, thus bringing on board
key capabilities in video communications.
The availability of better video quality is the driving force
behind people's decision to shift to Pay TV services. Hence,
Telefonica's acquisition of TokBox and its decision to use
Microsoft's GVP platform will likely bridge the gap and offer
high-performance and feature-rich TV services to viewers.
Telefonica will also see its cost of operation scaling down
significantly since Microsoft's GVP platform can simplify the
delivery of various TV services to multiple screens.
According to a study by ABI Research on TV platforms such as
cable, satellite and IPTV, Pay-TV service revenue may reach
$236.0 billion by the end of fiscal 2012 and may scale up to
$281.0 billion in 2017 at a CAGR of 19.0%. Pay-TV services are
poised for robust growth and this can be a good opportunity for
Microsoft to scale up its operations further.
For the first quarter of fiscal 2013, Microsoft reported
revenue excluding deferrals of $16.01 billion, declining 11.4%
sequentially and 7.9% from last year, and missing estimates by
2.5%.
Microsoft Corp. has a Zacks #3 Rank, which implies a Hold
rating in the short term (1-3 months).
MICROSOFT CORP (MSFT): Free Stock Analysis
Report
TELEF BRASIL SA (VIV): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research