T-Mobile completes Layer3 acquisition, on track to launch new TV service this year

John Legere
T-Mobile CEO John Legere (T-Mobile screen shot)

T-Mobile said it has closed the acquisition of Denver-based Layer3 TV, paving the way for the self-proclaimed “Un-carrier” to launch its own TV service this year.

With this acquisition, first announced in December, T-Mobile is positioning itself to take on cable providers like Comcast in the same way it has battled mobile rivals AT&T and Verizon. T-Mobile declined to release financial terms of the deal or give more detail on when the service will launch.

“People are ready for choice and change! Well, good news ‘cause that’s exactly what we’re gonna bring!” said John Legere, president and CEO of T-Mobile said in a statement. “I can’t wait to take the fight to Big Cable and Satellite TV on behalf of consumers everywhere!”

The new TV initiative will be led by Jeff Binder, CEO of Layer3 and now an executive vice president at T-Mobile. He will be joined by close to 200 others from Layer3, including former executives from AT&T, Fox, Comcast, Time Warner and more.

T-Mobile TV will work over a regular home cable, DSL connection, or any other type of internet connection. T-Mobile is looking to leverage its own wireless network for the service, a key potential advantage vs. other “over the top” IP-based TV offerings.

Jeff Binder, CEO of Layer3 TV poses with T-Mobile CEO John Legere and other T-Mobile executives. (T-Mobile Photo)

T-Mobile is betting big on next-generation 5G wireless to make wireless connections just as fast as home internet. T-Mobile is targeting 2020 for a national rollout of its 5G network, in part by leveraging spectrum it won in this year’s FCC auction.

While T-Mobile seems like an underdog going up against cable giants like Comcast and Charter, it has built a massive retail and customer base in recent years. T-Mobile US has 16,000 retail stores and 71 million customers, and it ships 40 million smartphones a year — existing relationships that T-Mobile can leverage to get people to try its new TV service on a variety of devices, including smartphones and set-top boxes.

By comparison, Comcast had 21.5 million residential customers as of the end of the third quarter, so in some ways T-Mobile is operating from a surprising position of strength.

Layer3 has developed an IP-based TV service, including a set-top box, and the company touts its relationships with content providers as one of its key advantages. As T-Mobile builds out its new TV service, Layer3 products will be available in some T-Mobile stores in Denver, Los Angeles, Washington D.C., Dallas and Chicago.