Nokia is planning to sell off its IP Video business to Toronto-based software company Volaris Group.
Volaris will take over Nokia’s caching and streaming products, origin and storage technology, and stream personalization software and launch a new pure play streaming technology company, Velocix. But Nokia is keeping its video integration business and associated employees.
Velocix will be operated as an independent business within Volaris Group's Communications and Media portfolio. Most of Nokia’s IP Video business employees will make the move to Velocix.
Nokia will keep a minority stake in the new company and “continue to play a critical role in supporting the company's growth,” according to a news release. The companies anticipate the deal will close during the fourth quarter of 2018. Financial details were not disclosed.
After the deal is done, Nokia will become a global channel partner for Velocix so it can continue selling and supporting Velocix products and services.
RELATED: Ericsson spins off broadcast and media business, renames it Red Bee
“This planned transaction marks our first investment in the highly dynamic media technology sector and we look forward to using it as a springboard for growth,” said David Nyland, portfolio leader and president of communications and media at Volaris, in a statement.
“Video plays a very important role in our customers' strategies, both as it relates to their services and the demands it places on their networks. Meanwhile, the technology behind video—including user experience, content packaging and delivery—continues to go through meaningful shifts. Our new partnership enables us to adapt and grow in this important period; together we can better navigate change while providing continuity for our customers,” said Basil Alwan, co-president of IP/Optical Networks at Nokia, in a statement.
Nokia isn’t the only networks company to back away from video services. Earlier this year, Ericsson announced that private equity firm One Equity Partners would take a 51% stake in Ericsson’s Media Solutions business. Ericsson maintained 49% of the shares of the new private company that resulted from the agreement.