Sources tell Bloomberg that Microsoft (NASDAQ:MSFT) is negotiating the sale of its IPTV unit to Swedish wireless equipment maker Ericsson AB (NASDAQ:ERIC). The companies could announce a deal within weeks.

The IPTV unit develops software that permits the transmission of television programming over wireless networks. Facing increased competition from other equipment-makers, Ericsson is looking to expand the range of services it can offer to wireless carriers.

Over the past ten years, Microsoft has emerged as the lead producer of wireless network TV delivery software. Microsoft’s IPTV software, called MediaRoom, is used by a number of wireless carriers including AT&T (NYSE:T). However, sources say that Microsoft wants to concentrate on transmitting TV through its Xbox game system.

Microsoft, which continues to struggle in its bid to crack the mobile device market with new Windows tablets and phones, recently started offering app developers $100 for each new Windows app submitted by summer.

Shares of Ericsson fell fractionally in Wednesday morning trading, while Microsoft shares edged up slightly.