GlobalData predicts that pay-TV households as a percentage of total US households will decline from 65% in 2019 to 47% in 2023, while the number of US pay-TV accounts will drop from 83 million in 2019 to just under 63 million in 2023. So why is T-Mobile entering this space?
For one, the company believes it can package content in a way that will appeal to those who remain in pay-TV’s clutches. Many who remain on pay-TV do so because they enjoy specific sports programming that cannot be found using OTT options. As such, T-Mobile has chosen to focus on live content news and sports and create lower-priced offerings with fewer channels.
While T-Mobile is taking the skinny bundle approach, viewers may find that gaining access to everything they want to watch, particularly additional sports channels, will require combining service packages, which will ultimately result in fatter, and costlier, bundles. TVision’s prices, if one wants a full slate of programming, are comparable to those of over-the-top streaming providers such as YouTube TV or Hulu + Live TV and even traditional pay-TV providers, making the overall offer less than disruptive.
5G broadband can drive revenue for T-Mobile
TVision’s headline-garnering ultra-inexpensive Vibe TV package, which only has 30 entertainment channels and costs $10 per month plus an optional $5 for 100 hours of DVR cloud storage, might attract highly budget-conscious or cash-strapped customers.
However, the ultimate end game for T-Mobile, which is a wireless company, is garnering revenue from its newly built 5G network. The company has plans to roll out 5G for home broadband services and it has prime spectrum to do so. T-Mobile is launching 5G using a large amount of mid-band spectrum, which enables the company to offer speeds in the hundreds of megabits per second range within a wide coverage area. By the end of the year, T-Mobile intends to reach 100 million people with this network by the end of the year.
As T-Mobile has the reputation for upending competition in the wireless industry, it’s not far-fetched to believe it can come to market with an ultra-competitive pay-TV and home broadband offering.