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T-Mobile to Launch Streaming TV Service in 2018, Buys Layer3

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T-Mobile is set to join competitors Verizon and AT&T in the streaming video business. In a news release short on specifics, T-Mobile said it will disrupt the industry by launching a mobile video TV service next year. There's no mention of channels included, the cost, or whether or not T-Mobile will create original programming.

The announcement promises to give consumers more choice, and rails against the problems with traditional cable and satellite pay TV services: "The Un-carrier will build TV for people who love TV but are tired of the multi-year service contracts, confusing sky-high bills, exploding bundles, clunky technologies, outdated UIs, closed systems and lousy customer service of today’s traditional TV providers."

This would sound more disruptive if there weren't already multiple skinny bundle packages on the market. AT&T was unimpressed, as a company spokesperson sniffed, "Un-original—yet further validation that the industry is dynamic and extremely competitive everywhere you turn.”

To fuel its goal, T-Mobile has acquired Layer3 TV, a streaming entertainment provider that currently offers service in five U.S. cities. The companies didn't divulge the price of the acquisition. Layer3 doesn’t provide wireless entertainment, but relies on a connected TV box. That makes it a curious choice for T-Mobile.

"This signals that they're interested in offering a vMVPD service," notes IDC research director Greg Ireland addressing the announcement. "I think T-Mobile has been at the forefront in creating accessibility to OTT content within a mobile experience, but missing from what they've done in the past has been indicators around where they might go with a linear TV or vMVPD service. To some degree, one could look at the Layer3 acquisition as a way to match what AT&T is going with DirecTV Now. It also fills in the gap in a broader OTT video integration strategy." Ireland notes that Layer3 has experience streaming linear television. It doesn't offer the same features as DirecTV Now, but he sees the acquisition as a precursor in the development of a linear TV service that will position T-Mobile well.

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