T-Mobile Learns TV Is Hard, Unlikely To Launch New Service Soon

Advertisement
Advertisement

T-Mobile has apparently delayed the launch of its new TV service due to it being more difficult to bring to market than the company had originally anticipated. This comes from a new report out of Bloomberg which in turn credits "people familiar with the situation" for the information along with the confirmation the service won't launch until sometime in 2019. Although those said to be in the know, do state the time-frame is tentative and open to change.

The details from the report are a little light on specifics, but the general suggestion is the ambitious plans T-Mobile has for TV have proved more difficult than the company's equally ambitious plans of delivering the end product to market in the initial time-frame set out by the company, with mobile-distribution rights said to be one of the main issues the project has been struggling with. These issues have led to the situation where T-Mobile has apparently been forced to either put out more of a standard TV solution or hold back the launch until it can deliver on the disruptive product it wants – with T-Mobile reportedly deciding the latter is the better option. At present, no information was provided on when exactly the service might launch beyond suggesting 'next year' in general.

T-Mobile's lofty TV ambitions

Advertisement

T-Mobile entering the TV game at the advanced level was all but confirmed when the company announced it was acquiring Layer3 TV for $325 million. Since then, the question has simply been when will the service arrive. As part of the pre-launch hype, the company had made it clear the service will be a competitor and different to the rest of the options due to it taking on a similar "un-carrier" approach to what T-Mobile offers in mobile. Irrespective of what it will offer, the official line has always remained the service would launch in 2018.

However, the first indications that T-Mobile was facing difficulties in sticking to its time-frame came through in October when T-Mobile's President & Chief Operating Officer, Mike Sievert stated during the company's quarterly earnings call that its TV service won't 'expand into mobile' until 2019. With that statement accompanying the confirmation the more general version of the TV service "will start later this year." If this latest report is correct, then that is no longer the case and 2019 will be when the service launches in general, as well as on mobile. Although there's no suggestion that the two will occur together which might also now mean the expansion into mobile may also now be delayed.

Time is important and sooner is better than later

Advertisement

While it seems clear T-Mobile intends to offer a better product, and is apparently holding out to ensure it is a better product, the company runs the risk of arriving to market too late. In many ways, it is already late to the party considering consumers have a wealth of choice now when it comes to streaming on-demand and live TV content. Therefore, even launching now would put T-Mobile's solution at a disadvantage. The longer it waits, the greater the disadvantage becomes, and the more costly it could prove in the long run.

Over the last year or two, the existing solutions have been in a battle to offer streaming-based TV at the best possible price. To the point where some companies are understood to be running at a deficit in a bid to attract more customers. The expectation is this model is unsustainable and there have already been clear indications from existing competitors┬áthat price rises in 2019 will come. In addition, and while this is still a young market compared to others, signs already point to companies continually price-matching in this respect where once one companies ups the price, others quickly follow – further evidence of the delicate nature of the market and the need to immediately increase revenue when an opportunity arises.

In some ways this may prove beneficial to T-Mobile if it can launch at a lesser introductory price while others are upping their price, although again, the longer this takes to happen the harder it might be for T-Mobile to motivate customers of another service to migrate. Especially considering these other companies already have additional plans in the works to mitigate against main package price rises. Take AT&T, for example, while the direct competitor to T-Mobile plans to increase the cost of its main DIRECTV NOW package in 2019, it will also be launching two additional services in the same year, at different price points to appeal to different customers – one that's entirely software-based and driven by HBO and other entities acquired through its Time Warner deal, and one that's hardware-driven.

Advertisement