December 15, 2017
T-Mobile US is buying Layer3 TV, a streaming pay-TV distributor, to launch its own pay-TV streaming service. In doing so, T-Mobile, the third largest wireless carrier (by subscribers) in the U.S., joins a growing host of other companies, such as Sony, Dish and YouTube, that aim to lure cord-cutters to their streaming services. Some of those efforts have been successful; AT&T, for example, now has one million subscribers to its DirecTV Now streaming service, which debuted last year and is priced as little as $35 per month.
The Wall Street Journal reports that “terms weren’t disclosed” for T-Mobile’s purchase of Layer3 TV, but that T-Mobile “said it plans to launch its television offering to cellphone and home-Internet customers nationwide next year,” and will make the service available to customers on other wireless networks.
T-Mobile, which did not reveal pricing for the new service, said it “can carry all of Layer3’s available content, which include channels from 21st Century Fox, Comcast’s NBCUniversal and Walt Disney.” Layer3, whose service starts at $75 per month, rents access to privately managed networks, which it says provides a better quality picture. Hulu and Netflix, in contrast, rely on the commercial Internet.
T-Mobile chief executive John Legere reports that the acquisition has “been in the works for a while and would have gone through with or without a merger with Sprint, a potential wireless tie-up the companies abandoned earlier this year.” Legere says the new streaming service will “be available on phones as well as on third-party portals like Apple TV, though the company hasn’t yet struck deals with those middlemen.”
“We’re going to create a variety of offers that will, of course, include some low-cost offers,” said T-Mobile operating chief Mike Sievert.
The Verge reports that, Layer3 TV is “only available in a few cities, including Chicago, Washington DC, and LA, and it lacks the kind of brand recognition of major players like Comcast or Verizon, or even more local brands like Optimum, RCN, or Spectrum.” What makes it appealing, it says, is bandwidth, although it “resembles a regular cable company” because the user gets a fiber optic cable hookup that she wires up to the cable box.
With its private IP network, the company can “manage your content and bandwidth directly, without having to worry about a middleman network throttling your data, or congestion slowing down your speed.”
Layer3 chief executive Jeff Binder “claims that the company can send HD video at a bandwidth of less than 4 megabits per second.” Layer3’s box is also “compatible with Alexa and Google Home for voice controls, and along with the main cable box, the Layer3 offers wireless breakaway boxes that make it easy to access content in other rooms without having to split your signal or lay out a coax line.” Much of this, however, “won’t necessarily apply to T-Mobile’s new service.”