T-Mobile to Acquire Layer3 TV and Launch Online TV Service in 2018

Bundled TV subscription and wireless plans could create new growth opportunities.

Subscription News: T-Mobile to Acquire Layer3 TV and Launch Online TV Service in 2018

Source: T-Mobile

Yesterday T-Mobile president and CEO John Legere announced that T-Mobile is going to ‘un-carrier’ TV in 2018, the company’s next phase in its mobile video strategy. According to the announcement, the Bellevue, Washington-based wireless carrier has agreed to acquire TV technology company Layer3TV, Inc. and work with them to create a disruptive, new online TV service for T-Mobile.

Layer3 TV’s product integrates television, streaming online video content and social media. Based in Denver, the company currently operates an online TV subscription service in five states. The acquisition is expected to close in the next few weeks, reports The Seattle Times. Terms of the deal were not disclosed.

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‘Today I’m announcing that T-Mobile is going to un-carrier your TV,’ said Legere in a video announcement. ‘That’s right. We’re about to take the fight to Big Cable and Satellite TV on behalf of consumers everywhere.’

In the announcement, in his characteristic confrontational style, Legere calls cable and satellite TV companies like Comcast, Time Warner Cable, Charter, Frontier and Fox ‘the absolute worst,’ saying they mistreat customers who post complaints on social media at the rate of about 4,000 times daily.

‘People love their TV, but they hate their TV providers. And worse, they have no real choice but to simply take it – the crappy customer service, clunky technology and outrageous bills loaded with fees! That’s where we come in. We’re gonna fix the pain points and bring real choice to consumers across the country,’ said Legere.

Mike Sievert, chief operating officer for T-Mobile, also commented on the need for change in the TV industry.

‘We’re in the midst of the Golden Age of TV, and yet people have never been more frustrated by the status quo created by Big Cable and Satellite TV,’ Sievert said. ‘That’s because the world is changing – with mobile video, streaming services, cord cutting, original content and more — and yet, the old guard simply can’t – or won’t – evolve. It’s time for a disruptor to shake things up and give people real choice like only the Un-carrier can.’

Subscription News: T-Mobile to Acquire Layer3 TV and Launch Online TV Service in 2018

Source: T-Mobile and Layer3 TV

According to The Seattle Times, T-Mobile had 70.7 million customers at the end of the third quarter, an increase of 1.3 million customers from the second quarter of 2017. A new streaming TV video subscription service may give T-Mobile the opportunity for additional growth by wooing customers from other carriers. The company said it will offer a bundle that includes unlimited streaming video combined with a mobile phone plan for a flat monthly rate and several options, but company representatives did not specify what those options will be.

Insider Take:

Now that the wireless industry has matured, companies like T-Mobile are looking for growth opportunities by offering special promotions, converting customers from other carriers, acquiring smaller players from related industries and bundling a range of services to attract and retain new customers.

Adding a new streaming video service will give T-Mobile the opportunity to bring in new business while diversifying revenue streams. We will be curious to see how the service is priced and bundled with wireless plans to make it competitive, as well as how competitors like Sprint will react to the news.