T-Mobile US To Launch OTT Service In 2018, Buy Layer3 TV
Zacks Investment Research | Dec 13, 2017 09:24PM ET
T-Mobile US Inc (NYSE:T) is entering the saturated U.S. pay-TV industry, with plans to launch its own streaming TV service in 2018. Meanwhile, the company’s recent deal to acquire Layer3 TV, Inc. will boost streaming service. The financial terms of the deal have been kept under wraps.
With this announcement, shares of T-Mobile US inched up 0.55% to $63.83 on Dec 13.
Based in Denver, CO, Layer3 TV is a cable company operating in Chicago, Washington DC and Los Angeles. It combines TV, streaming online video content and social media content under one platform. Moreover, Layer3 TV runs its own, private IP network to directly serve users content and can manage content and bandwidth directly, without bandwidth throttling. Layer3 TV can also transmit HD video at a bandwidth of less than 4 megabits per second.
T-Mobile will leverage LTE network speeds and Layer3 TV’s technology to roll out streaming TV service. Notably, offering of streaming TV services has become a popular trend in the U.S. pay-TV industry.
Similar OTT Launces
Internet-TV streaming service is gaining market traction gradually in the United States. Recently, the legacy pay-TV industry has been facing stiff competition from online video streaming service providers such as Netflix (NASDAQ:NFLX), Hulu.com, YouTube etc. because of their cheap source of TV programming. The low-cost over-the-top (OTT) video streaming service has resulted in massive cord cutting, which is currently threatening the pay-TV business model. Video offering, which represents the core business function of cable-TV operators, is losing popularity.
As a result, Internet TV streaming has emerged as a strong alternative to counter this competitive threat.
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