TMUS T Mobile US Inc

By Drew FitzGerald 

T-Mobile US Inc. struck a deal to offer Viacom Inc. channels to its cellphone customers, extending the telecom operator's foray into a turbulent pay-television industry.

The No. 3 wireless carrier by subscribers said its Layer3 TV service reached a "significant content distribution agreement" with Viacom, owner of cable channels MTV, Nickelodeon and Comedy Central. The companies didn't detail the terms of the arrangement or timing of the new offerings, which will include live channel feeds and on-demand content.

T-Mobile paid $325 million last year for Layer3 TV, a company that offered cable-like video service to residential customers. The carrier expanded its footprint to some households in four cities but pledged to use the new company for a more ambitious product that would give its cellphone customers more entertainment on the go.

T-Mobile executives initially planned to launch the new video service late last year but pushed back its debut to the first half of 2019 to negotiate carriage rights and improve the product. The company said Wednesday that the Viacom agreement "will play a key role in T-Mobile's delivery of compelling new mobile video services to consumers later this year."

The company hasn't detailed how much its planned service would cost and which shows, if any, would be available to cellphone subscribers free of charge.

The agreement comes as T-Mobile seeks federal and state officials' approval for a more than $26 billion acquisition of rival Sprint Corp. The merger, which would leave the country with three nationwide cellphone carriers, is under review.

T-Mobile struck a separate deal in 2017 with Netflix Inc. to offer the streaming video service on demand to family-plan customers. That move burdened the company with added costs but helped it attract and keep more cellphone customers, the company said.

Providing real-time TV channels is a trickier business. Cable and satellite-TV programmers often strike complex deals with distributors and are reluctant to let their partners break up profitable channel bundles by offering video a la carte. T-Mobile executives haven't explained their pay-TV plans but have promised their offering will be different.

"We think there's a more nuanced role for us to play in helping you get access to the great media brands out there that you love, and to be able to put together your own media subscription in smaller pieces, $5, $6, $7, $8 at a time," T-Mobile operating chief Mike Sievert said in a February conference call with analysts.

(END) Dow Jones Newswires

April 03, 2019 12:42 ET (16:42 GMT)

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