T-Mobile’s TVision will not disrupt pay-TV market but will gain fans

Following the recent news that T-Mobile US will begin offering TVision to its postpaid wireless subscribers on November 1, Tammy Parker, Senior Analyst at GlobalData, a leading data and analytics company, offers her views on the new service:

“The arrival of yet another streaming TV option in the US market is unwelcome news for cable and satellite pay-TV providers, as these providers are seeing their grip on the public continue to loosen. 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.

“T-Mobile feels it can poach cable and satellite pay-TV customers who want to escape bloated, expensive channel packages and long-term contracts, as well as cord-cutters who have already made the jump to over-the-top (OTT) streaming services but may be seeking a better option. However, the new TVision will appeal primarily to T-Mobile subscribers, even once it is made available to all viewers in 2021.

“For one thing, prices will likely be higher for people who do not subscribe to T-Mobile’s wireless service. Furthermore, there are plenty of T-Mobile fans who would love to get a streaming TV service through T-Mobile simply because they are brand loyal or want their wireless and TV services on a single bill. To that end, TVision’s main benefit to T-Mobile could be wireless customer retention, as people who combine services are less likely to churn away to other service providers.

“T-Mobile is taking the skinny bundle approach, but viewers may find that gaining access to everything they want to watch – particularly additional sports channels – will require moving up to more expensive TVision service tiers with fatter, and costlier, channel packages. TVision’s prices, if one wants a full slate of programming, end up being comparable to those of rival streaming TV providers such as YouTube TV or Hulu + Live TV and even traditional pay-TV providers, making the overall offer less than disruptive.

”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, may attract highly budget-conscious or cash-strapped customers. However, those types of subscribers are also more likely to be on low-cost prepaid wireless plans rather than T-Mobile postpaid plans, meaning they would not qualify to get TVision until eligibility is expanded next year.”

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