T-Mobile announced a deal Wednesday to acquire Denver-based Layer3 TV, which has launched multichannel service via IP in Denver, DC, Chicago, LA and Dallas. The new service will combine streaming TV and online video at a lower cost and doesn't restrict customers to lengthy contracts or bundles that include channels or content they don't want to watch.
But T-Mobile's confident it'll be able to persuade the estimated 1.6 million subscribers who left traditional cable companies in the first half of 2017. For instance, many T-Mobile wireless customers are getting Netflix for free. The acquisition catapults T-Mobile into the rapidly evolving video business.
"People love their TV, but they hate their TV providers", said T-Mobile CEO John Legere. And while it's only available in limited number of markets across the US, at present, in acquiring Layer 3, T-Mobile ultimately hopes to tap into "the wonderful content available from creators today" so as to change the present Cable TV distribution method for the better. On Wednesday, it said that it's buying Layer3, a TV provider that styles itself in the same, scrappy mold as the nation's third-largest wireless carrier. The company has announced that it will be launching a new, over the top streaming video effort sometime in 2018 that will mirror the no-hidden-fee wireless offerings that have made the carrier popular. As recent wireless price wars have squeezed the margins on voice and data service, the new frontier is offering access to exclusive video content that can lure customers and serve as a platform for advertising. "It's time for a disruptor to shake things up and give people real choice like only the Un-carrier can".
T-Mobile will continue to support Layer3 TV's current model in the cities where it's now available and plans to grow its reach across the country, executives said.
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.