T-Mobile plans to shake up the pay-TV market in 2018, as the No. 3 U.S. wireless carrier announced Wednesday it will acquire Layer3 TV and launch a ‘disruptive’ new IP-based TV service next year that is accessible at home or on the go.
Layer3 TV, which is currently available in five cities across the country, integrates television, OTT services like Xumo, and services like Facebook, Pandora, and YouTube into its set-top boxes.
On a Wednesday conference call T-Mobile executives said the deal is the next phase of T-Mobile’s strategy for mobile video. The company plans to build an integrated IP-based home and mobile TV service that “disrupts” the legacy TV model and alleviates pain points associated with traditional cable and satellite television.
“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,” T-Mobile CEO John Legere said in an announcement.
T-Mobile hasn’t laid out specifics for the offering but called out other TV providers, specifically AT&T, for locking customers into long-term contracts and undesirable bundles. However the company indicated it plans to bundle wireless with the new TV service, but intends to offer a variety of different programming packages.
The “Un-carrier” said it wants to bring together the best of home and mobile to provide a pay-TV service that allows users to access content seamlessly across devices, and pick up on one screen where they left off on the other.
Executives pointed to T-Mobile’s 17,000 retail stores, and access to 71 million customers who the carrier can introduce its new TV service to.
As far as hardware goes, the service will require some kind of in-home box, but could be user-installed and would utilize a customer’s chosen broadband provider. T-Mobile pointed out it is already a broadband provider through its wireless network, and said with the advent of 5G the traditional barrier between fixed and wireless broadband will fall away. Though 5G will accelerate this convergence, T-Mobile said it expects the new TV service will go nationwide ahead of the company’s 5G rollouts.
The company also envisions an app for mobile use.
The service will have a “tremendous” user interface T-Mobile said, and will retain Layer3 TV’s individualized platform, with a user profile for each person in the household.
All of Layer3 TV’s employees will join T-Mobile as part of the sale, and will remain based in Denver. Layer3 TV CEO Jeff Binder will continue to lead the operation and will join T-Mobile’s senior team as the head of T-Mobile’s integrated strategy for video and entertainment.
T-Mobile will continue to support Layer3 TV’s current model in the cities where it’s currently available and plans to grow its reach across the country, executives said.
While T-Mobile isn’t ruling out creating its own original content, for now the company is focused on three main aspects: access to content on all devices, discovering content in an easy-to-use manner, and customer service.
T-Mobile did not reveal the transaction value, but said the deal does not change its previously disclosed financial guidance.
Executives indicated the company anticipates generating a return on the subscription price itself, highly-targeted advertising and additional services, as well as synergies in the core wireless business.
“No market needs Un-carrier-ing more than pay TV, so we’re completely stoked to join T-Mobile in disrupting the status quo!” Binder said in a statement. “Together with T-Mobile, we’re going to ditch everything you hate about cable and make everything you love about TV better.”
You can see John Legere’s video blog about the announcement below: