January 16, 2021
T-Mobile CEO on how it can afford to undercut its rivals with TVision - Video

T-Mobile CEO on how it can afford to undercut its rivals with TVision – Video

T-Mobile just launched its Tvision over-the-top live TV service.
We’ve got CEO Mike Sievert on today to talk more about the announcement.
Mike, thanks for joining us.
Thanks for having me, Roger.
Good to see you.
Good to see you as always.
So Tvision, it was sort of a more traditional looking cable plan, part of this.
But today, it was a big reboot, talk a little about what this new Tvision plan is like.
Well, it’s the future of TV, we called it I don’t know if you cut the video.
We called it TV done right, because TV is so not done right in this country.
And people are tired of it, they’re leaving linear TV in droves.
We’re down to two-thirds of American households have traditional cable TV or satellite now, and falling rapidly.
And there’s a reason for it, it’s number 46, out of 46 dead last as an industry in customer satisfaction, according to a major survey.
People are so fed up with the way big cable does business.
So we finally decided it’s time to do something about it, and not just in a few markets like our precursor product but nationwide, with the launch of Tvision Live, TVision Viventi, Tvision channels today.
As far as I could tell, maybe not vibe, but the rest of the plans are structured very similar to some of the other services out there, right?
YouTube Live, or hololive your on care moves generally represent a big shift in the status quo.
So I’m just curious if this is it or we can expect more radical changes to these plans down the line.
Well, this is a big shift in order to get live news, and sports.
Which is what 80% of people say is the reason why they are stuck with big cable.
Witch other streaming services you have to pay $50, $60, $70.
It’s $76 by the time you get NFL RedZone over at YouTube TV.
And so, lots of companies have tried to solve this problem.
But what we did was chunk it up, and make sure there’s an option for people who are sports and news lovers.
A much lower cost option at just $10 a month for entertainment lovers.
And of course, the ability to add individual premium channels like stars, epics etc.
And so it’s a huge breakthrough.
The idea of starting at $40 being able to have all the live news and sports you want, and then options at 50 and 60, it’s a breakthrough.
You make a big point about pricing, and obviously, it’s very competitive with what’s out there.
But are these prices going to go up?
Are you guaranteeing that these prices are gonna stay locked in forever?
What you saw is a different approach here than what’s happened before.
This is a variety of different services instead of all one service.
Were trying to breakdown that giant, bloated, overpriced bundle.
Where in order to get live news and sports you also need to take hundreds of other channels which they just throw in.
No one ever watch is those things, they throw those in to sweeten the deal, because they’re asking you to pay the average cable bill $156.
Plus get this, almost $40 in fees, just the fees at cable are the same prices as Tvision Live we lunch today.
That includes everything that you might have to pay other than taxes.
So this is just a breakthrough that be able to get live news and sports starting at $4,000.
So in terms of pricing, and I mean, you just suggesting it might go down overtime, which is interesting.
Cuz most of the services we’ve seen the prices have gone up, and you’ve even pointed that out in your presentation.
The cost of content and the cost of negotiating for that content seems to keep driving prices upwards.
I’m curious why you feel confident that pricing would go down as opposed to go up, especially with just how the pricing dynamics have worked in the past, with some of these other services.
We can’t predict the future with certainty, but what I can tell you is that we’re using our scale as T-Mobile with nearly 100 million paying customers.
And the fact that the profit pool is over in wireless, we’re not intending to set up some big new profit pool on TV, were trying to serve customers.
So they’ll love us even more on the wireless side, were already the most loved brand in our space.
That’s what I’m carrier moves are investments in customers.
And so look, I don’t know what the content costs will be in the future.
I hope they come down, or I hope they become more flexible.
Meaning, what we’ve done here is we’ve offered more flexible choices.
Using our scale we’ve offered more flexible choices starting at just $10.
Maybe someday there will be $3 and &5 and $8 options.
Who knows, but you’re right, I can’t make long term predictions cuz I don’t know where content costs are going.
Well, I can tell you is where using our customer centricity, and our scale to pass massive advantages through to consumers.
And that part is gonna stick around.
That’s an interesting point, you’re saying that the money is being made on the wireless side.
Does that mean you’re losing money or breaking even on this?
Or what exactly is the cost structure for this service?
Well, we don’t intend for Tvision to be a loss leader or a profit pool, this is an uncarrier move.
This is an uncarrier move where the profit pool is in attracting customers, serving them well, having them be the most satisfied customers in wireless that stick with us longer.
That switch to us from AT&T, Verizon, and big cable that deepen their relationships with us.
That’s how will make money just by serving customers, we’ve proven over and over again.
You’ve covered uncarrier moves since uncarrier one where we make big fold investments in customers, might look costly at first.
But it comes back in the form of the love and the relationships we have with customers on the wireless side, this uncarrier moves no different.
Now you’ve hinted at Ortiz, the home broadband service stored the end of the presentation.
I don’t know if you give us any kind of indication on when we might see that.
What some of these bundles might look like if you have essentially a triple play bundle there that you can offer to customers?
Well, it’s happening now on 4G LTE, and we recently expanded to 450 towns and cities in the last few weeks.
And so, 4G LTE is out there, it’s a great test bed for us customers that are signed up for it are so happy, because a lot of these places only had satellite or DSL choices.
And now we’re showing up with wireless, unlimited, home Internet at incredible speeds that you can stream your hideout videos.
Where we’re going?
It’s 5G, and it’s coming soon.
And we’re gonna be using our massive mid-band spectrum portfolio to deliver hundreds of megabits per second to tens of millions of potential customers.
Or what customers expect a break or discount with these bundles in terms of pricing, I know it’s a little premature.
But what can you teasing in terms of the potential prices or plans that customers can see?
That deal is the deal for T-Mobile customers, and obviously, no one’s been able to offer something like that before.
And there’s a reason, because were offering it to T-Mobile postpaid customers.
And same with the $40 Tvision Live that’s live news and sports, starting at $40.
You get NFL RedZone and NFL Network at just the $60 level, this is a breakthrough.
And it represents the value you get by being a T-Mobile customer, so the bundles in the price.
Got it, and speaking of that, $10 vibe planet to point doesn’t include local channels, does include news or sports.
At very similar to an upstart service called Fyllo that’s been out there.
I’m just curious if you take any inspiration from that particular skinny bundle.
Well, we’ve looked at all the skinny bundles that have come before, and they’re either overpriced or they’re not comprehensive enough.
And so our view was look, let’s do it the Un-carrier way, let’s make sure that those basic cable channels are there.
Like comedy, and BT, and AMC, which has been an incredible creative powerhouse over the last few years discovery and many others.
And be able to provide people the entertainment, and everything they’re looking for both live as well as recorded library.
But on the other hand, the big insight today around Tvision Live is to be able to have live news and sports.
All the big networks on the news side, most of the big networks on the sports side more than anybody’s been able to cobble together at that price point, because it’s an investment in customers.
An that’s what the Un-carrier has always been about.
And I noticed you do have a number of AT&T own channels, like CNN, TBS, and TNT, there isn’t an option for HBO.
I was curious, what it was like working with a company that you’ve called dumb and dumber, dumb or dumber over the last couple of years?
How awkward is that to be at the negotiating table with a company you just raked over the coals for so long?
This industry is filled with professionals, and our view is will work with anybody if it’s in the service of our customers.
And you saw that in the lineup, and will continue to have that philosophy.
And so far we’re running into a similar philosophy with our competitors.
They want distribution for their media, we have as the number two wireless company in this country.
We have almost 100 million branded customers we can serve.
And so, that’s a huge opportunity for anybody in media.
The other thing I’ll point out is as it relates to other companies were a natural ally.
You pointed out that AT&T and Verizon are media companies, but so many media companies want an ally a major distribution force.
They’re scared to death of this OTT world, they’ve relied on the duopoly’s and monopolies of big cable to be there distribution for decades.
And now the world changing, and they don’t know what to do.
Well, we’re a place they can turn in the OTT over the top Internet streaming world as an ally.
Somebody who’s really focused on getting great content in front of consumers who will love him.
Thanks for your time, Mike.
It’s been Mike Sievert, CEO T-Mobile has been talking about his new Tvision announcement.
For more on T-Mobile coverage check out cnet.com.

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