By Daniel Hunter

Cisco has agreed to sell its TV set-top box business to French video company Technicolor for €550 million.

The sale marks the end of one of Cisco's most costly acquisitions, but it loses $1.8 billion worth of revenue.

Technicolor said it presents the opportunity to boost its position in the home-video market.

Hilton Romanski, Cisco’s senior vice president and chief strategy officer, said in a blog that its connected devices division, which included the set-top boxes, generated $27 billion since the acquisition in 2006.

But in May, Cisco said sales had dropped 5% in the third quarter, following a 19% fall in the second quarter.

“We now believe that the time is right, and that Technicolor is the right partner, to take this business to the next stage of evolution and growth,” Mr Romanski said.