T-Mobile’s New TV Service Is Struggling to Strike Good Deals

Mid age woman sitting at tableRecently T-Mobile purchased Layer3 and announced plans to take on the world of live TV streaming. Ever since that deal was announced T-Mobile has been quiet about how their new T-Mobile TV service is going.

Now thanks to their recently filed regulatory documents we may know why. The paperwork T-Mobile submitted in their effort to merge with Sprint shines some light on what is happening.

According to the documents found by BRG, 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.

So right now T-Mobile would charge $50 to compete with YouTube TV and PlayStation Vue’s $40 plan.

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.

Deeper down in the document you will find that T-Mobile plans to use their 5G network to build out an in-home and mobile video service for both HD and 4K. It seems that T-Mobile wants to use Sprint to help them expand and hopefully strike better content deals.

Will T-Mobile be able to launch their new streaming service by the end of 2018 as advertised? While it is still possible, how competitive will they be going up against Sling TV, Hulu, and DIRECTV NOW?

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