As T-Mobile reported strong third-quarter earnings this week, CEO John Legere took time on the company’s earnings call to address the impact of cable operators’ recent foray into mobile services.
Legere commented that Comcast, which launched its MVNO Xfinity Mobile offering last year, has maintained a fairly steady flow of subscriber additions (in the couple hundreds of thousands). However, he said T-Mobile is “not feeling that major pressure” from the cable giant, and personally believes Comcast’s mobile subscribers are switching over “almost exclusively” from Verizon.
In Comcast’s recent third-quarter earnings report, the company recorded adding 228,000 new customer lines, bumping the total past 1 million. Still the operator recorded a $178 million loss in the quarter related to its wireless efforts and Legere questioned scalability.
“That’s not really scalable and they [Comcast] should’ve just handed that money to Verizon to push those customers over to them,” he said.
As for pressure from Charter, which launched Spectrum Mobile service across its footprint in early September following a soft launch, Legere said that “it’s too early to tell.” Charter reported ending the third quarter with 21,000 mobile users.
Legere did acknowledge that the new entrants make for a “very competitive environment.” This is somewhat of a change in tune from earlier statements T-Mobile’s chief has made about competition from cable entrants. During T-Mobile’s fourth-quarter earnings call back in February, Legere called Comcast’s Xfinity Mobile “very irrelevant,” and expected Charter’s Spectrum Mobile to be “irrelevant squared.”
While maintaining confidence in T-Mobile’s performance, Legere had less harsh words for Comcast and Charter this time around.
“We feel very comfortable in what we’re doing and the response and what brings customers to T-Mobile, but there are clearly two additional players in the wireless space now in Comcast and Charter, and I’m sure others to follow,” he said.
As cable operators edge in to the mobile space, T-Mobile itself has been promising to launch its own ‘disruptive’ pay TV service since acquiring MVPD Layer3 TV last year. T-Mobile has also previously laid out plans for in-home broadband using 5G networks to offer bundled wireless TV and internet service, if the carrier’s proposed merger with Sprint garners approval.
On Tuesday’s earnings call T-Mobile COO Mike Sievert said the “New T-Mobile” intends to bring broadband competition to 52 percent of U.S. zip codes, and that 5G home broadband would be part of an integrated suite including 5G TV service.
“That’s what we have our heads down building, a TV service that is free from having to have wires, that has hundreds of high-definition choices coming in wirelessly, that’s free from a particular cable box, that puts you in control, that’s met your smartphone, that’s connected to your social, digital and mobile life in a way that TV has never been before as an island,” Sievert said.
According to Sievert, a new TV service is expected later this year, but it appears to be in-home only. Sievert said a mobile TV service will follow in 2019.
