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3 June 2021

Video as internet carrot back on T-Mobile roadmap

Mobile operators are harnessing video in different ways within their 5G offerings, in some cases as a distinct revenue stream, in others as a carrot to entice subscribers to one or other of the service packages such as fixed wireless internet access in the home.

T-Mobile USA has settled on the latter after dallying briefly with becoming a disruptive force in subscription video services and taking on the country’s major pay TV operators.

That is really the story behind its six-month long foray into subscription video launched in October 2020, which failed to gain much traction on the back of a fairly lackluster entry level package.

Like some other OTT offerings, it rather fell between two stools. On the one hand, there was an entry level skinny bundle comprising just 30 entertainment channels at $10 a month plus 100 hours of DVR cloud storage for $5 more, which did indeed hold some appeal for consumers unable or unwilling to spend the extra needed to obtain premium content including mainstream sports channels.

The problem was that prices for a fatter bundle, including selected premium channels, were comparable to the major streaming providers like YouTube TV or Hulu + Live TV, as well as some traditional pay TV packages. This has been a common refrain from legacy pay TV operators, that consumers will end up spending as much as before by the time they have aggregated all the content they want, and there is some truth in that. This tends to militate against emerging streaming providers which, lacking the brand awareness, are forced to compete on price, making it hard to be profitable while acquiring rights to a sufficiently wide range of content.

At least T-Mobile USA saw the light quickly and realized soon after launching Tvision that its video strategy should revolve around attracting subscribers to its 5G services rather than adding to the tally of primary rights holders or even original content developers.

Therefore, as we discussed in more detail last month, T-Mobile has given up on TVision as originally conceived, closing it down at the end of April 2021, instead lining up with Google for TV. There were some local factors, primarily problems with software supplier MobiTV, but the primary focus was to compete with the big players in 5G and regain possession of its subscribers so that it can derive extra revenues in various other ways, rather than having them leak away to providers of OTT services such as WhatsApp for messaging, or Amazon Prime Video for media entertainment.

So, while T-Mobile was closing down TVision Live and Vibe as services, the TVision brand lives on as a vehicle for Google’s YouTube. Indeed, T-Mobile has gone further than most other telcos so far by effectively outsourcing TV service provision to Google. At the same time to provide an entry level bundle, T-Mobile has struck a separate partnership with Philo TV, owned by several companies, including A&E, AMC Networks, Discovery and ViacomCBS, whose content it offers.

This makes it quite similar to T-Mobile’s retiring Zone entry bundle and is the same price at $10 a month. However, the premium YouTube TV offered by T-Mobile at $55 a month, discounted by $10 on the standard price, is itself performing the aggregation that T-Mobile knew it needed to be competitive. In the US, YouTube TV acquired Turner channels in 2018, then various local channels as well as the Discovery network in 2019, followed by Viacom channels including Comedy Central and VH1. T-Mobile now hopes that this will be enough to help attract more subscribers to its 5G home broadband service built on a mixture of low and mid bands.

Already some other super-tier 1s in various countries have been leaning in this direction, with Vodafone in July 2020 becoming the first UK telco to offer a choice of Amazon Prime’s full suite of benefits as well as Google’s YouTube Premium as part of a mobile plan. It had already brought in Spotify Premium, Now TV Entertainment Pass and Sky Sports Mobile TV.  This approach tending towards becoming universal portals for critical services and aggregating content, dovetails with positioning as home broadband provision. T-Mobile has realized that it is better to leave proven players to do the content aggregating.

Other major operators are pushing 5G harder for video outside the home, as Verizon is doing around sports events as stadia open up again to crowds. This is a very different play, harnessing 5G in tandem with edge compute to enable the low latency required to execute AR (augmented reality) quickly enough for displaying instant scenarios, as well as delivering stats at the moment they are relevant.

Verizon has just expanded in-stadium 5G partnerships with the National Hockey League in the US, as well 15 more National Basketball Association teams. The NHL partnership is perhaps most ambitious technically, supplementing live streams of games with video highlights and real time stats overlaid in AR.

The importance of such features at a time traditional sports are facing mounting competition from esports, gaming and other activities for younger fans, was highlighted by Dave Lehanski, EVP of business development and innovation at NHL. “The tremendous capabilities being demonstrated by Verizon 5G and edge compute are paving the way for us to provide fans with new experiences and unprecedented ways to consume live game content,” said Lehanski.

Hockey is particularly conducive to features that can only be enabled by 5G and edge compute, as opposed to older cellular technologies or WiFi, according to Kyle Malady, CTO at Verizon.

“Hockey is such a fast-paced game that only 5G and edge compute can provide real time stats or multiple camera angles personalized to each fan in the stands on their phone,” he said. “We’re developing cutting-edge applications powered by 5G, mobile edge compute and AR now so that when more fans return to venues, there will be new benefits to the live experience.”

Verizon has just demonstrated the new capabilities on two 5G phones side by side. One used Verizon 5G Edge and the other extracted stats from the public cloud. With 5G Edge, end-to-end latency was cut by 35%, which enables stats to be incorporated alongside the relevant footage with imperceptible lag and in real time as the game progresses, or so Verizon asserted.