T-Mobile still plans to launch a TV service in 2018, but it will be limited to a fixed location like a house. The “use it anywhere” streaming TV service won’t launch until sometime in 2019.
This change raises more questions about if T-Mobile TV will be more of a traditional cable TV service like Layer3 that T-Mobile now owns or more of a streaming service like Sling TV, DIRECTV NOW, and Hulu.
T-Mobile has stated that they are struggling to get the type of deals they wanted. According to recent regulatory filings, Layer3 is having to pay between 20 and 30 percent more in fees than their larger rivals. To create the same packages that Sling TV or Hulu have, T-Mobile would have to charge about $10 more.
Here is what T-Mobile said in their regulatory documents:
The acquisition of Layer3 provided T-Mobile with a foothold in the video distribution marketplace, while positioning the company to leverage its national distribution footprint for expansion of the business going forward. However, further expansion of the business will be limited for T-Mobile on a standalone basis. In particular, Layer3 faces higher costs, especially for licensing content, than its major MVPD rivals because its smaller customer base does not provide the scale needed to leverage volume discounts. Indeed, T-Mobile estimates that Layer3’s content acquisition costs are 20–30 percent higher than its larger rivals for accessing the same programming.
For now, we will have to wait and see what T-Mobile does next.
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