T-Mobile Buys Layer3, Plans to Launch TV Product Next Year

T-Mobile said Wednesday it will launch its own TV service in 2018, buying IP-based TV and internet provider Layer3. “People love their TV, but they hate their TV providers,” said T-Mobile CEO John Legere. “The crappy customer service, clunky technology and outrageous bills loaded with fees! ... We’re gonna fix the pain points and bring real choice to consumers.” Legere told analysts he wants to take on cable and satellite TV operators, and the move into TV coincides with the launch of 5G. T-Mobile officials expect the deal to close in weeks. Craig Moffett, analyst at MoffettNathanson, questioned the investment. “When the world seemed to want skinny bundles, Layer3 TV went fat,” he wrote investors. “When the world seemed to be going purely virtual, Layer3 bet on proprietary infrastructure (the middle mile). At a time when everyone seemed to be trying to rid themselves of hardware, Layer3 bet on set-top boxes.” Many details are unknown, said Wells Fargo’s Jennifer Fritzsche. “Near-term revenue and profitability outlook will be more muted as [T-Mobile] scales the product and integrates it with their wireless customer base.” BTIG’s Walter Piecyk said the deal provides “technology expertise, existing and broad content relationships, and a technology platform for T-Mobile to enter the living room.”