T-Mobile’s Un-Carrier X is its Riskiest Move Yet

T-Mobile today announced the latest of its Un-Carrier moves, this one focused on mobile data usage. The headline was that T-Mobile customers will be able to watch unlimited video from 24 major video providers, but it also announced several other moves at the same time. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan can also be reached at jan@jackdawresearch.com or (408) 744-6244.

Embracing free video is the riskiest Un-Carrier move T-Mobile has launched yet, but it’s also potentially the most disruptive. T-Mobile previously allowed customers to stream music from major services for free, but music accounts for a relatively small percentage of data usage. Video is by far the largest contributor to data usage today, and including video from so many major providers risks a substantial increase in usage. T-Mobile’s proprietary optimization technology should help to reduce the bandwidth consumed, but T-Mobile hasn’t said quite how much bandwidth this will save. There’s also a risk that 480p video, which would have been fine on most smartphones a couple of years ago, will look subpar on today’s devices, many of which support 1080p HD or higher resolutions. It sounds like T-Mobile will improve the quality of the video provided through the BingeOn program over time, but it may have to do that sooner rather than later to keep customers happy.

However, the “free video” headline should make for compelling marketing for T-Mobile. Removing the worries associated with watching video on mobile devices will be hugely appealing for customers. T-Mobile’s phone subscriber growth has slowed a little in recent quarters, and it’s needed something to get growth going faster again – this move looks like it could do that. The big caveat for subscribers is that some major services like YouTube are missing, and customers may not understand or be able to keep track of which services are included.

Meanwhile, the Family Match program also announced today was a needlessly complex distraction from the main announcement. Having talked up the simplicity of T-Mobile’s plans at the beginning of the event, T-Mobile then muddied the waters considerably when it talked about Family Match. T-Mobile risks losing its reputation for simple pricing with the two elements of Family Match. The doubling of data allowances, on the other hand, was a far more straightforward change.

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