Bloomberg: Intel Looking To Sell Internet TV Service For $500 Mln

(RTTNews) - Chip maker Intel Corp. (INTC) is looking to sell its yet-to-be-launched OnCue online pay-TV service for about $500 million, Bloomberg reported Monday, citing people with knowledge of the process.

According to the Bloomberg report, Santa Clara, California-based Intel is now seeking to secure a sale of OnCue by the end of 2013, as it abandons a plan to enter the pay-TV business. Telecom giant Verizon Communications Inc. (VZ), said to be a suitor, has already commenced talks with owners of broadcast and cable channels about terms for a streaming TV service.

Verizon runs the FIOS fiber-optic service that competes with cable companies. An acquisition of OnCue would enable Verizon to sell pay-TV beyond the current FIOS footprint.

In September, media reports indicated that Intel was seeking partners to help its planned web-based television services. The company had tested a service that combines both live and on-demand TV along with its own software and set-top box.

Intel reportedly needed a partner with a base of Internet subscribers or rights to films and television shows, and was yet to announce any deals with content providers. However, under the company's new CEO Brian Krzanich, Intel's TV efforts had slowed as he has emphasized on getting Intel chips into mobile devices.

A sale of OnCue would enable Intel to recover the costs of developing the service, while also enabling it to supply chips to the new owner. Samsung Electronics Co. (SSNLF) and Liberty Global Ltd. (LBTYA) are also said to have met with Intel for buying OnCue.

The OnCue system is able to provide pay-TV programming over any high-speed Internet connection, making it a threat to cable-TV services that deliver shows over dedicated lines installed by territory. Intel developed a system that includes servers, set-top boxes and applications that stream content to phones and tablets.

INTC closed Monday's trading at $23.75, down $0.12or 0.50 percent on a volume of 43.39 million shares.