T-Mobile’s TVision, a newly announced bundle of live streaming channels, gives the company’s traditional wireless customers another reason to stick with the carrier. And just around the corner is a 5G-based home broadband service that could make leaving T-Mobile a much more complicated task.
Phone. Television. Home internet. Sound familiar?
T-Mobile is in effect resurrecting a 2.0 version of the old triple play bundle, a favorite strategy of traditional telecom and cable companies. For years, the likes of Verizon and Comcast would keep subscribers hooked with discounted bundles of traditional phone service, DSL or cable internet, and a package of pay TV channels. T-Mobile’s new bundle would consist of 5G cellular service, 5G-based fixed mobile broadband and an over-the-top streaming service that mimics a cable TV bundle.
There’s irony in T-Mobile reassembling this type of bundle after spending several years bashing Verizon, AT&T and the cable companies for their antiquated ways. AT&T, in fact, has moved away from the triple play and is banking on streaming services like HBO Max, and both it and Verizon have consistently posted customer losses in their traditional pay-TV businesses.
But T-Mobile’s reputation for upending traditional business models and offering consumer-friendly price breaks makes it a possibility customers need to keep an eye on.
“We launch things and we disrupt and then we figure out ways to add more value,” CEO Mike Sievert said in an interview on Tuesday after the TVision announcement.
The pricing of the TVision packages undercut the competition. There’s the $10 “Vibe” skinny bundle that includes entertainment channels but eschews news, sports and local channels, cheaper than upstart Philo. There’s also a $40 bundle with more than 30 channels, also cheaper than comparable services like YouTube TV or Sling TV. Sievert said he wasn’t looking to make a profit (or lose money) on this service, and looks to use the service to keep customers happy or convince other to switch to T-Mobile.
“We’re not trying to set up a profit pool in TV,” he said. “We’re trying to serve customers.”
Sievert noted that this pricing would be available to T-Mobile’s postpaid customers, or people with higher credit scores who pay at the end of the month. He also noted that the lower rates served as a benefit to existing customers, and hinted that non-T-Mobile customers would likely have to pay more. In other words: T-Mobile’s trying to make it pay for consumers to sign up for its core wireless service.
That sounds a lot like the old triple play tactics. It’ll be interesting to see what happens when home broadband comes into play in a big way.
T-Mobile already offers home internet on its 4G service, and in the last few weeks expanded to roughly 450 cities. The $50-a-month service uses LTE technology, and serves as a bridge to something better down the line.
“It’s a great test bed for us,” he said.
Things get more interesting with home internet using 5G, which T-Mobile teased at the end of the presentation. The company is planning to use what’s known as its midband spectrum — a swath of valuable airwaves that can enable high 5G wireless speeds across a decent distance — to offer a more robust broadband experience than what even some of the fastest internet service providers can offer.
“Anything is possible in terms of bundled offerings,” said Walt Piecyk, an analyst at LightShed Partners, noting the potential of that midband spectrum.
For comparison’s sake, T-Mobile’s nationwide 5G network uses low-band spectrum and is far slower despite its greater reach (think modestly faster than 4G). Sievert said T-Mobile plans to reach 100 million people with its midband 5G network by the end of the year, with speeds in the hundreds of megabits per second range to millions of potential customers. On Wednesday, the company said that it had nearly doubled the number of markets with mid-band spectrum to roughly 410 cities and towns.
Will T-Mobile use home broadband as another incentive to keep customers loyal to its profitable wireless business or turn it into a lucrative source of revenue? Cowen analyst Colby Synesael believes TVision will serve as a hook to for customers to sign up for home broadband, so likely the latter.
Sievert wouldn’t comment on what the pricing would look like for its future broadband product or whether it would offer a discount for signing up for all three services.
But you can count on T-Mobile trying to make a big splash with it.
“That’s what un-carrier moves are — investments in our customers,” Sievert said.