T-Mobile is paying Dish customers to defect
The launch of T-Mobile’s (TMUS) TVision streaming TV service this month shows that T-Mobile is moving to diversify its business by opening a new revenue stream away from its core business of selling wireless plans.
The launch of TVision is also escalating the competition between T-Mobile and satellite TV provider Dish Network (DISH).
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T-Mobile has introduced a program that has it seeking to increase its number of TVision subscriptions at the expense of Dish and other cable and satellite pay-TV providers. Under the program, T-Mobile is footing the bills for satellite pay-TV subscribers who want to switch to TVision. According to T-Mobile, nearly half of satellite pay-TV subscribers are locked into contracts that don’t satisfy them simply because they’re worried about being slapped with early termination fees that can run into the hundreds of dollars. To make the switch to TVision smoother for satellite TV subscribers, T-Mobile is covering their early termination bills up to $500.
T-Mobile is specifically targeting Dish and DIRECTV customers with this offer. DIRECTV is a subsidiary of AT&T (T), one of T-Mobile’s major wireless competitors.
T-Mobile and Dish clash
Recently, T-Mobile and Dish have clashed on a number of fronts. Dish is one of the companies that are opposed to T-Mobile’s proposal to merge with its rival Sprint (S), which regulators are currently reviewing. Dish is also building a wireless network that would see it join cable providers Comcast (CMCSA) and Charter Communications (CHTR) in selling smartphone plans, thereby increasing competition for T-Mobile in the wireless market.
Revenue rose 6.0% YoY (year-over-year) at T-Mobile in the fourth quarter, whereas Dish recorded a 5.0% YoY fall in its revenue in the same period.