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Will T-Mobile Launch Ad-Supported Video Streaming Service?

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Is T-Mobile launching a free streaming service?

On January 26, Cheddar, citing an unnamed source, reported that T-Mobile (TMUS) could be launching a free ad-supported video streaming service in the next few weeks. The company has yet to comment on the news. According to Cheddar, its ad-supported video streaming service could be based on technology licensed from Xumo. However, Xumo later refuted the report and stated that it was working with T-Mobile “on a snackable content app launching on two phones next month.”

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Last year, T-Mobile completed its acquisition of Layer3, a provider of free OTT (over-the-top) and VOD (video-on-demand) services. With its acquisition of Layer3, T-Mobile indicated its plans to foray into the world of virtual MVPD (multichannel video programming distributor) similar to Dish Network’s (DISH) Sling TV, YouTube TV (GOOG), Hulu (CMCSA), Disney, (DIS), AT&T (T), and Fox (FOXA) with its Live TV.

Mobile video streaming and 5G

Last year after its acquisition of Layer3, the company indicated its plans to launch a pay-TV service. However, T-Mobile indicated at the Citi Global TMT West Conference earlier this month that it perceived a greater opportunity in the growth of video streaming on mobile phones. However, this means that the company intends to concentrate on building up a 5G-based Internet network first. The company indicated that the completion of its acquisition of Sprint (S) would result in broadband coverage that would extend to 52% of zip codes in the United States.

At the end of the third quarter of fiscal 2018, T-Mobile owned 31 MHz (Megahertz) of 600 MHz of low-band spectrum in the US. The company effectively holds 41 MHz of low-band spectrum including 600 MHz and 700 MHz.

At the end of Q3 2018, the company has deployed low-band spectrum across 291 million POPs (point of presence) and currently has 21 devices compatible with 600 MHz spectrum. As a result, it expects its 600 MHz spectrum holdings will be used for the country’s first 5G network by 2020.

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