The Register Citizen (Torrington, CT)
T-Mobile signals move into online TV service
T-Mobile US Inc. agreed to acquire closely held Layer3 TV Inc. as the wireless carrier prepares to enter the crowded field of online television service next year.
With the purchase, TMobile joins its larger peers AT&T Inc. and Verizon Communications Inc. in a strategic shift to media and video ventures as the wireless industry struggles to find new growth. AT&T started an online TV service called DirecTV Now a year ago that recently exceeded 1 million subscribers. Verizon secured expanded rights this week from the National Football League to stream live football games to mobile devices.
While T-Mobile, the third-largest U.S. wireless carrier, has been able to expand its mobile phone subscriber base faster than peers, the pace of market share gains is under pressure as Verizon and AT&T have responded with unlimited data plans aimed at people looking for cheaper ways to support their mobile video habits.
Still, the online TV service field may be a challenge for T-Mobile. Barring a major fourth-quarter comeback, 2017 is on course to be the worst year for conventional pay-TV subscriber losses in history, surpassing last year’s 1.7 million, according to Bloomberg Intelligence. That figure doesn’t include online services like DirecTV Now. Even including those digital plans, the five biggest TV providers are projected to have lost 469,000 customers in the third quarter.
“It’s going to make things interesting,” said Roger Entner, an analyst with Recon Analytics. “Companies like AT&T and T-Mobile have the ability to cross-sell TV to their customers. It’s easier for wireless carriers to sell TV over the internet than it is for cable companies to sell it over wireless.”
T-Mobile’s purchase of Layer3 is the latest example of a wireless provider jumping into the TV business. Last year, AT&T agreed to buy Time Warner, home of CNN and HBO, though the acquisition is the subject of a government lawsuit trying to block the deal. Verizon plans to start its own online TV service sometime next year, after several delays.