Company Trend Analysis - T-Mobile To Enter Home Market Through TV - FEB 2018

BMI View: Even though it so far lacks details, T-Mobile has the potential to disrupt the US pay-TV market. The acquisition of Layer3 TV means an entry into the home market, as the carrier looks to convergence to retain its customers. A true disruptive move would be to include the most popular content, including over-the-top, under one reasonably priced bundle.

T-Mobile has agreed to purchase Layer3 TV, and plans to launch a pay-TV service in 2018. This means that T-Mobile will become a converged player, being able to offer mobile, broadband and pay-TV services, as it embarks on a renewed strategy following the failure of its merger with Sprint. The carrier will face strong competition from the incumbents in the fixed market, where it hopes to leverage the development of 5G technology, as well as Layer3's proprietary technology, where it runs its own private IP network to deliver content.

Layer3 TV is not a major player in the pay-TV market, as it is only present in five cities so far, including Chicago, Washington DC and Los Angeles. What is key is its technology, using a private IP network which means it can control the content it sends to its customers directly, without the need of a Content Delivery Network (CDN). It still requires customers to purchase an external broadband subscription, and this is where the deal with T-Mobile will help the company offer services nationwide, leveraging first its 4G network and eventually 5G.

Disrupting After Sprint's Deal Failure
Market Share (%), Q317
Source: BMI, operators

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