T-Mobile Heads Into Pay TV Fray

Having already disrupted the mobile telephone space plenty with its Uncarrier positioning, T-Mobile is turning its sights to Pay-TV.

The carrier announced this morning it would acquire provider Layer3 TV to create this new TV service. The company promised to bring its “Uncarrier” ideals to the Pay-TV space, offering an alternative to people who are tired of multi-year contracts, confusing bills, “clunky technologies” and “lousy customer service.”

In a video announcement, company CEO John Legere called the cable and satellite TV sector the “absolute worst,” and that people post 4,000 critical comments on social media about the companies every day. “It’s not surprise that eight of the 10 most hated brands in America are cable and TV companies,” he said in the video. 



As mobile has grown to become a top platform for viewing, Legere asserted the industry was ripe for change, and that T-Mobile should be the one to bring it. “People want their TV, they just don’t want it from big cable,” Legere said. “This is part of our long-term Uncannier strategy in video and mobile entertainment … It should not be that hard to watch what you want, where you want when you want.”

Promising to “Uncarrier that shit” in the television category, Legere said the satellite and cable providers have been using “all the [wireless] carrier tricks, and then some,” including long-term contracts, bundling services and increasing charges after inexpensive trial periods. “It’s all just a ploy to siphon as much cash from your pockets into their bank accounts,” Legere said. 

Legere said he expected the deal to close in the next few weeks before beginning building the system for the mobile age. 

Mobile carriers and TV providers have been increasingly close companions over the past few years. AT&T in July 2015 acquired satellite provider DirecTV, and has been offering bundled deals to consumers since. (The company is currently attempting to merge TimeWarner Cable as well.) Comcast earlier this year also began offering its own wireless service under its Xfinity brand. 

While the move may seem offbeat on the surface, it’s likely more deals will follow as the telecommunications industry prepares for 5G service. 

“This is a bit odd because T-Mobile has been winning against the big players largely because they’ve focused on core values for phone users and not gone into content,” says Rob Enderle of Enderle Group, a technology consultant. “However, we know that the cellular providers will start blending their wired and wireless services for the home when 5G becomes available and T-Mobile appears to be setting up for that as well as beginning to hedge against anticipated content/service bundles from their big competitors. So I’d take it as a hedge for future expansion and against more near-term content bundles.”

At the very least, the move is another sign of the "democratization of cable," says Colin Petrie-Norris, CEO of streaming video provider Xumo. "It used to be that these companies controlling the cable into the house held all the power," he says. "But with mobile that opens things up."

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