T-Mobile penetrating into streaming TV
T-Mobile (TMUS) plans to launch its streaming TV service in 2018 to make space in the trending over-the-top (or OTT) video streaming market. Most recently, T-Mobile has agreed to acquire broadband video startup Layer3 TV to help boost T-Mobile’s TV streaming service. T-Mobile plans to leverage LTE network speeds and Layer3 TV’s technology to roll out streaming TV services.
Layer3 TV runs its private IP network to directly provide user content and manage bandwidth without bandwidth throttling. Layer3 TV can also transmit HD video at a bandwidth speed of less than four megabits per second. The acquisition of Layer3 TV would not only bring TV services but also stream online video content and social media content.
Growing OTT market
Low-cost OTT video streaming services are currently trending as Millennials increasingly prefer to watch content online, instead of paying high monthly bills to cable and satellite TV providers.
This trend has allowed new players to enter the market and has made it difficult for pay-TV companies such as Comcast (CMCSA) and Dish Network to retain subscribers. Recently, Alphabet (GOOGL) announced its YouTube online television service, while Hulu is also planning to launch an online television service.
Netflix (NFLX) leads the video streaming space through considerable investment in original content and movies. Amazon (AMZN), with its launch of video streaming services, has stepped up its competition with Netflix. In 3Q17, Netflix added 5.3 million subscribers, as can be seen in the graph above.