Taking a different approach than competitors, today T-Mobile announced its latest move to bring content to consumers and lure in subscribers – by paying for unlimited family plan customers’ Netflix bill.
Starting Sept. 12 the Un-carrier will offer free standard Netflix subscriptions to new and current customers who have at least two T-Mobile One unlimited data plans. Customers with promotional plans like T-Mobile One Unlimited 55+, or two lines for $100, must upgrade to a T-Mobile One family plan to be eligible.
Customers can go on the T-Mobile app and link their Netflix account to it, the charge and credit for a $9.99 plan will show up on the phone bill. If customers have or want the premium Netflix subscription, they pay an additional $2 dollars on their wireless bill.
The move shows further how mobile and content are colliding, with AT&T seeking to buy Time Warner, and bundling free HBO for select higher-end wireless customer and DirecTV Now subscribers. Verizon for its part bought out Yahoo last year, and has invested in its own mobile video service called Go90.
T-Mobile CEO John Legere took a jab at the Un-carrier’s competitors saying in a statement, “The future of mobile entertainment is not about bolting a satellite dish to the side of your house or resuscitating faded 90s dotcoms. The future is mobile, over-the-top, and unlimited.”
Don’t expect other carriers to be offering the same, as Legere noted on a press conference call that T-Mobile struck an exclusive long-term relationship with Netflix.
“It’s a great deal for our customers,” he said.
Though terms of the deal were not disclosed, T-Mobile Chief Operating Officer Mike Sievert acknowledged that the move is “a big investment” for the Un-carrier, though hinted that Netflix gave some sort of discount. He said that the investment will work out for T-Mobile in terms of customer and revenue growth.
In the second quarter of 2017 T-Mobile posted 784,000 postpaid phone net additions, while AT&T reported postpaid net phone losses of 98,000. However, AT&T beat T-Mobile in prepaid net additions for the quarter, posting 267,000 prepaid net adds, compared to the Un-carrier’s 94,000.
BTIG analyst Walter Piecyk said T-Mobile’s receent promotions seem to target getting a second line for single-line users, as the shift to family and data share plans have been a main driver in the decrease in industry churn over the past two years.
“As an example, a 10 basis point reduction in our churn estimate would add $225 million to our 2018 revenue estimate for T-Mobile,” Piecyk commented. “T-Mobile is also likely to convert its overindexed single-line user base to multi-line, resulting in higher gorss adds, market share, and revenue growth.”
T-Mobile is also using the Netflix move to flex its network strength. In August the company made a clean sweep of all six awards categories in OpenSignal’s latest State of Mobile Networks report, pulling ahead as Verizon and AT&T struggled to cope with the revival of unlimited plans on their network.
The Un-carrier has been pressing toward its goal of blanketing more than 1 million square miles with new 600 MHz coverage by the end of the year, with Cheyenne, Wyoming, being the first to get 600 MHz coverage in August.
T-Mobile also recently announced LG’s V30 as the first handset that is actually capable of supporting those new airwaves.
