Mobile Jumps Into the TV Business, Will Challenge Cable

WATCH VIDEO. T Mobile US president and CEO John Legere unveiled plans to launch a disruptive new TV service in the US in 2018 by acquiring Layer3 TV

In a press release, T-Mobile claims that its service, which will debut sometime in 2018, will be as disruptive to the cable TV industry as the company's wireless cell phone service plans were in that industry just a few years ago. He also said the new service, a combination of streaming TV and online video, will fix "pain points" such as multiyear contracts, high bills, bad customer service or slow technology and bring "real choice" to customers.

All of Layer3 TV's employees will join T-Mobile as part of the sale, and will remain based in Denver.

Shares in T-Mobile rose 1.2% to 64.27 on the stock market today.

The move gives T-Mobile a video strategy that can match larger rivals, including Verizon and AT&T, who have extensive pay-TV holdings, which they are increasingly integrating into their wireless offers.

In a blog post released this morning, the company announced that its new service is geared "for people who love TV but are exhausted of the multi-year service contracts, confusing sky-high bills, exploding bundles, and clunky technologies". It'll be interesting to see if T-Mobile can replicate that success in the TV business.

The announcement that T-Mobile teased yesterday has now been made, and it's a big one. At the time, Layer3 said it planed to create 300 jobs over the next several years. "It only makes sense for the Un-carrier to do to TV what we're doing to wireless: change it for good!" Similar to services like YouTube TV and PlayStation Vue, Layer 3 carries the signals of most USA cable networks and pay channels like HBO, Showtime, and ESPN, but bundles them with a straightforward HD decoder and PVR set-top box that connects to a television in your living room. T-Mobile does say that its TV offering will utilize its nationwide retail stores as well as its sales and customer care organizations.

The two services are similar, though Layer3 offers more 4K streaming options.

Terms of the agreement were not immediately disclosed, though Layer3 had raised more than $100 million from investors.

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