T-Mobile US embraces video, cites $45 billion in data “overbuying”
T-Mobile in the US has once again turned the tables on its US rivals, allowing 24 of the most popular OTT video services to travel across its network for free – without the customer having to pay a penny. The only caveat is that the maximum video speed is 480p, which is pretty much ideal for a phone. T-Mob said it may consider raising this later, as better compression technologies become available.
The move is designed to grab yet more market share from AT&T and Verizon, who are thought to be planning similar advantages, but only for OTT video services they control, such as Go90. T-Mob is appropriately calling this “Binge On”.
The “Uncarrier” US operator says that the system is powered by some special technology inside its network, which sounds to us like little more than use of a CDN to get it to the base station edge, and some video recognition and optimization at the edge – all technologies available to any operator if they care to pay the small premium involved. It will also use a form of WiFi First, shifting video apps to WiFi whenever the phone is in range of a WiFi Access Point which the phone already has the credentials to. Chances are that means that 80% of the video traffic it is giving away is already paid for by the customer or the business they works for, in broadband fees.
T-Mob has tied the Binge On service to certain levels of its “Simple Choice” data package, which means that not only will it pull customers from other networks, but it will also get quite a few to upgrade to the Simple Choice packages from its existing customer base.
At the same time it is also offering new Simple Choice packages which spreads to the entire family, for about the price of a single user for AT&T and Verizon. While it still costs $100 a month for two people in a family to have 6GB of data a month, and this package includes all this “free” video traffic, but to add a third person to the same monthly data cap costs $20 and a fourth is free. T-Mob hopes it will get parents to pay for the upgrades to put children on the same level and rightly points to similar packages at AT&T and Verizon where 6GB is shared for the same price, rather than each person getting 6GB each.
A statement was issued to carefully highlight the advantage over the other US operators, “The old carriers are trying to exploit this trend (to stream video) − and their customers − to line their pockets. For carrier customers, the surge in wireless video has translated directly into an unprecedented surge in overages. Together, the carriers are projected to rake in a record $2.4 billion this year from overage penalties-up a staggering 60% from $1.5 billion just last year. Roughly one quarter of AT&T and Verizon customers say they’ve been hit by overages in the last 6 months – that’s twice as many Verizon customers getting billed for overages compared to just two years ago. Worse still, the carriers’ overages scare customers into buying more data each month than they need-only so Verizon and ATT can repossess it after 30 or 60 days. American wireless customers waste an estimated $45 billion annually overbuying wireless data they don’t use.”
That’s a stark statistic, if true, and T-Mob completes the picture by saying that customers can carry over up to 20 GB of unused 4G LTE data (roughly half of the family package) into the next month, for domestic use in the next 12 months.
Included in the exemption are the most popular OTT services such as Netflix, HBO Now, Sling TV, Showtime, Starz and Go90, as well as its own T-Mobile TV, DirecTV’s service, Vevo, Fox sports, Vudu and Crackle. It also takes in some sports packages like EPSN and Major League Baseball.
And T-Mobile is saying that as long as any new OTT service meets key service criteria, such as having a 480p version, they can join the fun.
It was thought that the FCC’s plan to shift all ISPs, whether fixed or wireless, to Title II, might open the way to some carriers advantaging their own video services by saying that video traffic does not contribute to monthly data caps, but T-Mobile has gone the whole hog and made it possible for most OTT services to travel for free.
One of the technical issues seems to be that YouTube clips are NOT included among the approved video sources and neither is Facebook. This is thought to be simply that it is hard for video optimization software to identify this traffic accurately, and it could be fixed if YouTube tweaks its outputs. It is thought that T-Mob’s video optimization software cannot pick out the HTTPS secure Web format.
The Binge On service works like a “toggle” using the same process to switch it on as switch it off. When it is on, customers cannot get HD video, but always have the option to switch it off. The idea is that if you wish to power your TV from your phone, you will have to switch off “Binge On”, and you’d better make sure the signal is coming over WiFi. Binge On is being downloaded into existing phones, so anyone that wishes to use it can switch it on after November 15th.
Interestingly T-Mob could get an avalanche of orders over the thanksgiving season, when people are known to be on the lookout for new phones and service packages and if that happens, it could swell its Q4 numbers significantly. We shall see in its January numbers.
T-Mobile is adamant that no streaming service is paying for placement onto Binge On there is only the requirement to meet simple technical standards. However it will also offer a promotion for Sling TV, which will be 30% off when bought from T-Mob, so a commission fee may well be in place for those orders.
T-Mob continues to be the operator in the US which does the most to disrupt the mobile business and as a result of its Uncarrier moves, it has recently overtaken Sprint as the third largest network in the US.
T-Mob made a similar move in music earlier this year and now most music services are covered in its Music Freedom service, so similarly a wide number of video services are likely to join.
Even customers who have unlimited data plans, which are still available from T-Mob, get something from the feature because they are allowed unlimited streaming when using the phone as a mobile hotspot, and from January onwards will also get a free video rental from Vudu each month.