T-Mobile US Inc (NASDAQ: TMUS) unveiled a part of its new strategy in the cable TV industry Wednesday, with the service scheduled to launch April 14 in eight markets.
The latest announcement — which comes in the wake of Viacom (NASDAQ: VIA)'s content agreement — is little differentiated from the many offers available in the market and comes with a “synthetically bundled” price that is much higher than what is charged by telcos and MSOs, according to Guggenheim Securities.
Mike McCormack maintains a Buy rating on T-Mobile.
While it’s probably too early to draw significant inferences into T-Mobile's longer-term ambitions, the recently announced cable plan is uncharacteristic for the "uncarrier" and most unexciting, McCormack said in a Wednesday note.
Consumers are going asset-light, which translates to significant CPE cost savings for PayTV providers, the analyst said. Against this backdrop, it’s surprising to see T-Mobile aiming to compete in the “thin-client” battle with its Layer3 TV division, he said.
Consumers already have extensive choices, and it may have been better for T-Mobile to focus on an app-only service, McCormack said. The offering is undifferentiated in a crowded market, the analyst said, adding that the synthetic bundle price point is unlikely to attract significant interest.
While the launch begins in eight markets, T-Mobile plans to offer its streaming service nationwide in the back half of 2019.
T-Mobile shares were trading up 0.87 percent at $72.79 at the time of publication Thursday.
Photo courtesy of T-Mobile.
Latest Ratings for TMUS
|Dec 2018||Raymond James||Maintains||Strong Buy||Strong Buy|
|Oct 2018||Wells Fargo||Maintains||Outperform||Outperform|
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