Why is T-Mobile selling TV services?



T-Mobile has said it before and on Tuesday said it again: It’s taking on big cable, providing simplified and more affordable plans that the “cableopoly” isn’t doing.

Prior to the announcement, the company hinted about its latest “un-carrier” move, saying “it’s ON.” On Tuesday, it announced three distinct streaming services and a new streaming device that will be available nationwide.  

The new TVision service will be available first for T-Mobile’s postpaid wireless subscribers starting November 1. That will be followed up by legacy Sprint phone customers who will be able to get it in the coming weeks, followed by prepaid customers. People who are not T-Mobile customers will be offered the service next year.

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The service will be in all of T-Mobile’s channels, including retail stores, customer care and digital. It’s sold with a TVision app that uses data on an internet connection like any over-the-top video, like YouTube TV. Standard video optimization and prioritization rules apply.

The new TV offering includes several tiers. For example, TVision VIBE includes access to more than 30 channels featuring comedy, lifestyle and drama for $10 a month. TVision Live TV is $40 a month for more than 30 channels featuring top sports and news.

One could argue this is the golden age of streaming with so many choices. T-Mobile played a role in that with its “Netflix on Us” offering. But there’s still 65% of the market that’s using traditional cable or satellite TV, and they’re “pretty unhappy” with the channels they want versus what they have to pay, according to Robert Gary, senior vice president, T-Mobile entertainment.

RELATED: T-Mobile refocuses TVision with Android TV device and new plans

None of the existing providers address what T-Mobile considers a key thesis, where so many Americans value live, relevant content. “There’s no content more relevant live than news and sports, so we put a major emphasis on trying to create, if you will, the smallest possible priced offering that really focuses on filling that space, so that people can have the choice to consume video the way they want and not have to leave anything behind,” he explained.

“We really feel like we’re trying to approach this space where customers need more choice, and they need a value proposition frankly that doesn’t make them have to buy a bunch of things that they don’t want to get to the content that they do want,” he said.

Big cable is the target, he acknowledged, and unlike the cable companies, T-Mobile doesn’t have a castle to defend. “We start this business literally today,” he told Fierce. “We’ve tried to break up the traditional cable bundle into pieces so that customers will have more choice.”

The offer means wireless customers can add the TV service to their wireless account, paying one bill, which brings up the problem of “sticker shock,” where the consumer gets one bill that’s so big it’s a turn-off. But the idea is to simplify things for consumers. T-Mobile is approaching it as the “trusted provider in wireless” that’s offering what the cable companies traditionally offered.

Is there a role for 5G in this? It’s not required but helps in meeting scale and increased demand. 

During the launch event, T-Mobile CEO Mike Sievert teased that more will be coming. With T-Mobile’s 5G network, it’s preparing for 5G home internet services across the country, so that can be part of the package. It’s similar to what the cable companies are doing – bundling wireless phone service with broadband service.

Why TV now?

The timing is no coincidence. T-Mobile closed its merger with Sprint on April 1. T-Mobile had been selling TVision in a number of stores in some markets, but now it can go nationwide and sell it in more retail stores.

“It’s something we’ll be watching for – is this popping up in every store?,” said Jeff Moore, principal of Wave7 Research, which regularly conducts retail store checks across the country.

With virtually everyone owning a cell phone, carriers need to find other services to sell. AT&T has DirecTV nationwide and Verizon sells video in much of the Northeast via its Fios service. 

RELATED: Marek’s Take: Mobile operators shouldn’t underestimate their cable competitors

Plus, it’s about churn. The more services customers get from one carrier, the more likely they’re going to stay with that carrier.

“It will be interesting to see what kind of bundle they’re able to launch,” Moore said. “Will they launch a triple play bundle?” That once again shows how wireless increasingly competes with cable.


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