Major Wireless Carrier Acquires Denver-Based Layer3 TV
With the undisclosed buy-out T-Mobile enters the paid TV space, setting out to disrupt the legacy-driven industry
Denver's premium broadband video startup, Layer3 TV announced its acceptance of terms to be acquired by T-Mobile USA, Wednesday, Dec. 13, in a deal that will expand the service nationwide, with the goal to reduce friction and failings in the $100 billion paid-television market.
Details about the new service, which will build on Layer 3's existing high-quality offerings for mobile and home use, as well as financial terms of the agreement remain unclear as the companies negotiate final details, and contracts for the acquisition officially close in early 2018.
To date, Layer3, which leases network access from major players in the telecommunications space, raised nearly $80 million from investors and ramped up to a team of 125 people nationwide. For the time being, Layer3's only Colorado service is in Longmont, with hubs in Chicago, Washington, D.C., and a handful of other cities. Service will continue in those markets and expand to wireless video as well, blanketing the country throughout the next year, per the details of the agreement.
Layer3 plans to keep its downtown Denver headquarters, according to Jeff Binder, co-founder and CEO of the startup, which launched in Boston in 2013 and moved its headquarters the following year to Colorado in an effort to align with telecom and cable TV industry members in the region.
In a statement about the acquisition, T-Mobile's President and CEO, John Legere compared the TV industry to the mobile business, hearkening back to the his company's "uncarrier campaign."
"T-Mobile is the only wireless carrier [that's] growing," Legere said during a conference call about the deal. "We are going to accelerate what we do with customers by entering and disrupting this market."
Other players in the space include Colorado-based Sling TV, YouTube TV, DirecTV Now and more.
In the immediate future, T-Mobile will add a subscription video service with targeted advertising.
In the past three years, T-Mobile has become the third-largest carrier, only trailing AT&T and Verizon, while offering customers unlimited data and flexible plans. Legere predicts there's a comparable opportunity to elevate T-Mobile's standing in the video space with Layer3 in the family.