Inter Corporation (NASDAQ:INTC) plans to spin off its online pay-TV service, OnCue by the end of the year and is demanding $500 million for the unit, according to a report from Bloomberg citing people familiar with the matter.
OnCue from Intel a threat to cable-TV providers
The asking price from Intel Corporation (NASDAQ:INTC) would help to cover its costs on the ambitious foray, which it previously planned to start, but later decided to get rid of. Intel would be supplying the chips to the new owner. It was earlier reported that officials from Samsung Electronics and Liberty Global had a discussion with Intel for the acquisition of the OnCue.
Brian M. Krzanich, Intel’s new Chief Executive Officer, who took charge in May, has put Intel’s TV efforts on the back burner as he wants to focus more on mobile devices.
California-based Intel’s OnCue is capable of providing pay-TV programming on any high-speed Internet connection, which makes it a threat to the regular cable-TV providers, who provide their services through dedicated lines installed by territory. The system developed by Intel Corporation (NASDAQ:INTC), which includes servers, set-top boxes and applications, could stream content on phones and tablets.
Intel’s spokeswoman Laura Anderson and Bob Varettoni, a spokesman for Verizon declined to comment on the development, according to Bloomberg.
Verizon looks serious for OnCue
It is believed that Verizon Communications Inc. (VZ), who is in talks with the chip maker for the OnCue, has started talks with the owners of broadcast and cable channels on the terms for a streaming TV service, says the report.
New York-based Verizon is one of the biggest phone and wireless operators in the US. Verizon, which operates FiOS fiber-optic pay-TV service, is also a threat to cable companies. The acquisition of OnCue would help the Verizon to expand its portfolio of services by offering pay-TV on other medium apart from current FiOS footprint. According to Bloomberg, the wireless operator has been in talks with media companies asking them if a streaming service would require new contracts or the existing rights of FiOS TV could be amended to suit the new service.
On Monday, Inter Corporation (NASDAQ:INTC) shares were down 0.5% to $23.75 in New York. Year to date, shares of the chip maker have gained 15%. Verizon, whose shares have gained 16% this year, lost 0.4% yesterday.