• by Alex Weprin , December 13, 2017

Mobile carrier T-Mobile will launch a nationwide over-the-top streaming video service in 2018, built on technology from Layer3 TV, which it is acquiring.

Layer3 is a cable company that sought to bring together traditional television channels with streaming video services in a single user interface. It has already launched in a handful of cities, but is not yet available nationwide.

Terms of the agreement were not immediately disclosed, though Layer3 had raised more than $100 million from investors.

In a video announcing the deal, T-Mobile’s eccentric CEO, John Legere, attacked the cable and satellite companies that his mobile company would now be competing against, while offering a general idea of what T-Mobile’s OTT service would look like.

“It’s no secret these guys are the absolute worst,” Legere said, as the logos of companies like Comcast and Charter appeared behind him.

“People want their TV -- they just don’t want it from Big Cable,” he added. “Today’s legacy TV model is utterly broken, and it looks a hell of a lot like wireless from a few years ago.”

Legere said T-Mobile’s video service would not require any contracts, would be watchable on every connected device, would combine traditional channels and streaming services like Netflix, and would be available to preview or buy in any of T-Mobile’s retail stores.

In a research note, SunTrust analyst Greg Miller wrote that the acquisition was a net positive, and that linking Layer3's TV product with T-Mobile's existing relationship to Netflix could help drive new subscribers. T-Mobile offers some mobile subscribers free access to Netflix.

A senior executive at a competing OTT service, meanwhile, told Digital News Daily that with AT&T entering the OTT space through its DirecTVNow service, and with Verizon investing in original content, it was only a matter of time before T-Mobile made a larger play in the video space. 

"Video is a logical product to bundle with mobile service, and their Netflix partnership seems to be paying off," they said. "Where they price this new service, and the quality of the channels on it, will be the x-factors here. There are already other players with low prices and great user interfaces."