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6 September 2018

FCC filing claims T-Mobile + Sprint = 5G, 4K, disruption, cost savings

Five years have passed since T-Mobile US coined the term “Un-carrier” which turned out to be a stroke of marketing genius, but the way we see it, almost everything T-Mobile has invested in since has formed the bricks and mortar of the operator’s plans for a polished and equally disruptive TV business. This less than easy feat became more evident than ever this week, as T-Mobile confirmed what we all suspected, that being the exclusive carrier of its wireless-only TV service is the only way to take on AT&T.

In a redacted filing to the FCC, T-Mobile outlined the next vision for Layer3 TV and its pending merger with Sprint to form New T-Mobile – claiming the combined clout can provide enough capacity for delivering 4K content wirelessly nationwide. T-Mobile initially promised to deliver a disruptive service based on Layer3 TV during 2018, following the $325 million buy in December, a target it looks set to miss and increasingly appears to hinge on getting the Sprint deal approved. This is why the latest claims from the marketing master must be approached with extreme caution.

A key new detail reveals that the Layer3 TV brand will be replaced, as the filing, spotted by FierceVideo, stated that the New T-Mobile service would help a number of subscribers (exact figure redacted) break up with their pay TV providers – courtesy of the market’s first wireless-only bundle for TV and home internet.

There is little doubt that T-Mobile’s new wireless-first TV service will disrupt big cable and satellite TV, whatever form it takes, but the bigger issue here, however, is convincing the FCC that a combined Sprint-TMO network can really bring 4K resolution quality TV to urban and rural areas. It promises to use “immense capacity and coverage of New T-Mobile’s 5G network”. T-Mobile is known for having technologically advanced network infrastructure, but both Sprint and T-Mobile have hapless video offerings, which is why the purchase of Layer3 was so important. Now Sprint’s inclusion in the venture is becoming ever more essential – to the point T-Mobile, with its usually cool-headed CEO John Legere, is showing signs of anxiety.

T-Mobile’s Binge On offered something different to fit with the Un-carrier branding but ultimately the distribution of some 100 video services with uncapped data allowances was never the final T-Mobile vision – and even this was heavily criticized for throttling video to 480p at 1.5 Mbps which is more than adequate for smartphone viewing.

Now T-Mobile is waving the 4K flag at the FCC while putting emphasis on lowering prices, not raising them – insisting that it can only offer bundled services and bring cost savings to consumers if these network assets are combined – despite its previous skepticism about a 5G-based fixed wireless access model.

The letter from T-Mobile’s law firm DLA Piper stated, “In particular, the merged entity intends to enter the in-home broadband marketplace with an attractive alternative to wired broadband at a lower price. The merged entity will have sufficient capacity to offer an in-home product at a lower price than current offerings in over half of US zip codes, bringing broadband choice to many consumers for the first time.”

“The combination of T-Mobile’s and Sprint’s complementary spectrum and tower assets enables the deployment of a broad and deep nationwide 5G network that will be able to deliver fiber-like speeds and offer tremendous capacity. In particular the combined spectrum allows for accelerated refarming of spectrum to get to robust 5G faster. The combined sites enable expanded capacity through densification and thereby greater spectrum reuse. Moreover, site work done to transition the networks into one will enable the merged company to add additional 5G capacity at very low incremental cost. The result is a world-leading, fast and deep nationwide network with enormous capacity and a low cost per gigabyte,” said the filing.

So while AT&T’s DirecTV Now has gradually risen to popularity by being made available to subscribers of any mobile or broadband network, T-Mobile will keep its cards close to its chest to poach pay TV and broadband subscribers as it has done so successfully in the mobile world. It intends to carry its Un-carrier model over to TV, with better pricing and packaging, with simple to use technology, without bloating bundles and lengthy contractual obligations – hopefully with or without the helping hand of Sprint’s assets.