Tilgin has will divest its IPTV (News - Alert) business to UK-based Amino Technologies and will focus on its IP Residential Gateway business, the company announced.

 

As customers understand the unique benefits provided by a residential gateway, the concept of connected home is fast gaining momentum. A connected home lets the customers access advanced entertainment such as IPTV and video-on-demand from the comfort of their living room. It also allows the customers to distribute media around the home via their home networks.

 

Focusing on this upcoming market, Tilgin (News - Alert) concentrates on providing IP Residential Gateways, which make the “Connected Home” a reality. Tilgin says the company can supply advanced broadband services into households as it has a strong market position in this domain. The company states that its net sales in IP Residential Gateways increased 68 percent from the same period last year, and 39 percent from the second quarter.  

 

“Our IP Residential Gateway (News - Alert) business shows good growth and profitability. As we focus our resources in this area, we will take full advantage of our strong position as operators launch the next generation of broadband services", says Ola Berglund (News - Alert), CEO of Tilgin. "With its broad IPTV product portfolio, Amino has the reach and resources to take the IPTV business to the next level.”

 

Tilgin IPTV AB has been divested for an initial consideration of SEK 30 million on a debt-free basis. An additional maximum consideration of SEK 15.0 million based on sales in 2009 is also available, which is a capped cash earn-out mechanism.

 

The company says that although its IPTV business has great future potential, it has not yet reached the volumes required for sustainable profitability. The net sales in the IPTV segment amounted to SEK 6.7 million in the third quarter. The operating loss amounted to SEK 12.9 million.

 

But the company has been finding customers to deploy its services nonetheless. Recently, Tigin was awarded a $1.6 million order from a major Nordic telecom operator who will use the company’s solution to continue rolling out IP services.

 

According to the agreement Tilgin’s Vood 322 IP residential gateways and Tilgin’s service and device management software VCM, will be deployed in Swedish households.