T-Mobile has recently signed an agreement to acquire Layer3 TV, and subsequently introduce a new TV service some time in 2018. Based in Colorado, Layer3 TV is a well known cable company that not only provides basic cable TV services and premium channels, but also streams online video and social media in several markets throughout America. In buying the Layer3 TV brand, T-Mobile is looking to make full use of the cable company’s video content offerings in order to better compete with legacy cable and satellite video operators.
No details were disclosed regarding the acquisition deal. As for the planned new TV service next year, T-Mobile has not released any information yet regarding pricing. But the third biggest mobile operator in the United States (check out our 2017 review of the carrier) did hint that the service will be web based, offered in different tiers, and will come with an ad subsidized offering. The Uncarrier is also looking to make its upcoming TV service available to all consumers, not just subscribers of T-Mobile, on mobile devices and home TV devices (e.g. Apple TV).
It appears that T-Mobile is looking ready to move on from the collapse of its merger negotiations with another national US carrier, Sprint. More than a month ago, both companies had agreed to call off discussions for a potential tie up. If the deal had pushed through, a new combined business entity would have emerged to challenge the dominance of industry leaders Verizon Wireless and AT&T.
Looking at the bigger picture, T-Mobile’s decision to acquire Layer3 TV may be interpreted by some as sort of a preemptive strike. Indeed, its competitors are not sleeping when it comes to strengthening their respective video and digital media content offerings. Verizon Wireless has existing MVNO deals with cable companies Charter Communications and Comcast, while only starting to leverage its recent purchases, AOL and Yahoo. AT&T right now is looking to close its acquisition deal of Time Warner (which owns popular fare like HBO) despite opposition from the United States Department of Justice, while last month, Sprint has announced that it has struck an MVNO agreement with Altice, the fourth biggest cable operator in the country.
While it is true that the Layer3 TV deal will mark T-Mobile’s first attempt at entering into the over the top (OTT) market, the carrier has had experience in providing video offerings for mobile users. Some may remember that back in September earlier this year, the company had started offering Netflix subscriptions, free of charge, to its subscribers. And then in November of 2015, it had grabbed some headlines with the introduction of its Binge On offering. Now with the acquisition of Layer3 TV, the Uncarrier should be able to generate added momentum heading into 2018.
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