T Mobile's Layer3 TV Acquisition Is Scaring The Telecom Space

What Happened

T-Mobile US Inc (NASDAQ: TMUS) shares popped Wednesday after announcing its acquisition of Layer3 TV for an undisclosed amount.

Why It’s Important

The purchase pushes T-Mobile into cable and satellite TV services while hastening the TV industry into the “mobile age and 5G era.”

“We’re getting ready to take on & disrupt another broken, arrogant industry - CABLE!” T-Mobile CEO John Legere said in a series of tweets. “We already took on & changed the #2 most hated industry in America… why not take on #1 now?!”

Legere said the move, which will enhance smartphone-based media consumption, is in response to accelerated cord-cutting and consumer dissatisfaction with “Big Cable.”

Competitors sold off on the news, with AT&T Inc. (NYSE: T) dropping 1.2 percent, Comcast Corporation (NASDAQ: CMCSA) 2.1 percent and Verizon Communications Inc. (NYSE: VZ) 1.7 percent.

What’s Next

T-Mobile will leverage its LTE network speeds and Layer3 TV’s technology to roll out a TV service in 2018.

“We’re gonna #Uncarrier that S#%* & make HUGE changes in a broken industry, just like we did with wireless,” Legere tweeted.

At time of publication, T-Mobile shares were trading up 1.2 percent at $64.26.

Related Links:

What To Do With Sprint, T-Mobile Now That A Merger's Off The Table

Bullish Comcast Analyst Models For A 33% Upside

Image Credit: fanaticTRX (Own work) [CC BY-SA 3.0], via Wikimedia Commons