T-Mobile said Wednesday it agreed to an acquisition of Layer3 TV and will be using the firm’s technology to launch its own TV service in 2018. Chief Executive Officer John Legere announced the move as part of the company’s strategy to “un-carrier the cable industry” and attempt to compete with traditional cable giants using techniques already employed by its wireless business. No financial details of the Layer3 TV acquisition have been provided by the third largest mobile service provider in the country, with the firm only revealing that the deal itself is expected to close in the coming weeks, after which it will immediately start using Layer3 TV’s technologies to create its own Internet TV service.
By embracing the cord-cutting trend, T-Mobile says it’s looking to directly take on Comcast, Time Warner, Charter, Cox, and Frontier, pointing out how major cable and satellite providers are also the country’s most hated companies. The newly announced deal was presumably in the making while T-Mobile was still negotiating a potential merger with Sprint and should ultimately allow the carrier to diversify its portfolio and continue fueling its growth despite the saturated state of the U.S. wireless market. The announcement also marks a strategical departure for T-Mobile as Mr. Legere was previously critical of the concept of telecom firms entering the TV segment, being quoted in 2015 as saying that AT&T is selling DIRECTV because “it can’t sell anything else.” T-Mobile CEO also explicitly criticized cable bundles as part of the Layer3 TV deal announcement, though triple-play and quad-play offerings are also likely to be part of the firm’s future portfolio.
It’s currently unclear when exactly will T-Mobile be launching its TV service but a second half of the year appears to be a realistic release window given how the platform has yet to enter active development. Layer3 TV’s existing TV service is available in five U.S. cities but it’s presently unclear whether it will be shutting down immediately after the acquisition. In a move reminiscent of its promotional activities in the wireless segment, T-Mobile presented the development as its attempt to fight the country’s big cable companies on the behalf of consumers.