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T-Mobile Opens a Brand New Revenue Stream

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TVision starts at $90 per month

This month, T-Mobile (TMUS) launched its long-anticipated TV service, diversifying into the TV subscription market and opening another revenue stream apart from its principal business of selling wireless plans. T-Mobile’s TVision Home, as the service is called, launched in a handful of states on April 14, and it will roll out to more markets in the coming months.

T-Mobile’s TVision is an over-the-top video service akin to Dish Network’s (DISH) Sling TV or AT&T’s (T) DIRECTV NOW. The service offers more than 275 channels and over 35,000 on-demand movies and TV shows. Netflix (NFLX) is one of T-Mobile’s content partners for the TVision service. T-Mobile has also drafted Viacom (VIAB) as a content partner.

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T-Mobile moves to capitalize on cord cutting

At the moment, T-Mobile derives most of its revenue from its sale of wireless plans. T-Mobile generated $11.4 billion in revenue in the fourth quarter, with its wireless service business contributing 72% to its overall revenue. The launch of TVision will open another revenue stream for T-Mobile and will allow it to capitalize on the cord-cutting wave.

According to eMarketer estimates, 33 million Americans had abandoned cable and satellite pay-TV subscriptions as of 2018, and the number is expected to top 55 million by the end of 2022. For cable and satellite TV companies such as Comcast (CMCSA) and Dish, this shift indicates a shrinking market. For T-Mobile, the shift indicates an expanding market for its TVision service.

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