Verizon Communications on Tuesday announced it has struck a deal with Intel to purchase the chip giant's TV business for an undisclosed sum.
As part of the deal, Verizon will pick up the intellectual property rights and other assets that power Intel's OnCue Cloud TV platform. The telecom firm said the transaction will "accelerate the availability of next-generation video services, both integrated with Verizon FiOS fiber-optic networks and delivered 'over the top' [online] to any device."
The transaction, expected to close in the first quarter of 2014, is subject to customary regulatory approvals and closing conditions. Verizon said it would make employment offers to "substantially all" of the 350-person Intel unit - including its current management team - which will remain in Santa Clara, California.
Once the transaction closes, Verizon plans to integrate IP-based TV services with FiOS video. For FiOS customers, this should mean improved search and discovery functions, as well as easier cross-screen capabilities. Verizon said the deal also gives it capabilities to expand its mobile video offerings in the future.
"The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it," Verizon Chairman and CEO Lowell McAdam said in a statement. "Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation. We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices."
Meanwhile, Intel CEO Brian Krzanich said the technology could enable Verizon to "change how people interact with content."
"The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers," he said.
Rumblings of an Intel-run TV service began in March 2012, when the Wall Street Journal first noted that the service would bundle U.S. TV channels, much like cable and satellite TV providers already do, to deliver them over the Internet through a set-top box.
A company executive in February confirmed the project. Originally scheduled to launch by the end of 2013, the system in September was said to be delayed until 2014 due to lack of funding. By October, there were reports that Intel would instead sell to Verizon.
The news comes after word spread that Intel is gearing up to cut roughly 5 percent of its workforce this year.