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T-Mobile binges on BingeOn video subscribers

The company continues its torrid pace of growth thanks to perks like its BingeOn unlimited video service, though things may slow in 2016.

Netflix is a key partner for T-Mobile's BingeOn program.

Photo by CNET

Nowadays, you're more likely to watch your phone than talk on it.

Thanks to the explosion of streaming video apps such as Netflix, YouTube and HBO Go, countless hours of entertainment are at your beck and call. Grab a little boob tube on the train home or kill a few minutes on your coffee break.

The growth of mobile video underscores a shift in how we use our phones, with the devices being just as much about entertainment as they are about communication.

The wireless carriers have taken notice. While Verizon and AT&T are working on their own video services, T-Mobile has opted to let its customers watch unlimited video.

T-Mobile was quick to understand the power of mobile video to lure new subscribers. In November, the nation's No. 3 wireless carrier launched BingeOn, a video streaming program with partners such as ESPN and Netflix. It works by compressing the quality of the video so it consumes less data, allowing customers to go crazy.

T-Mobile's consumer-friendly campaign and perks like BingeOn are paying off. Confirming numbers it released in January, T-Mobile said Wednesday it added 2.1 million total new customers in the fourth quarter, its third straight quarter above the 2 million mark.

The growth yielded a profit. T-Mobile reported fourth-quarter earnings of $297 million, or 34 cents a share, beating Wall Street expectations.

Bellevue, Washington-based T-Mobile is poised to slow down in 2016 as competition heats up. The company said it expects to add 2.4 million to 3.4 million so-called postpaid customers -- people who pay at the end of the month and typically have higher bills -- in 2016, a decrease from the 4.5 million it signed up last year.

T-Mobile's video strategy, which requires it to partner with others, contrasts with Verizon, which built and launched its own Go90 mobile video service late last year. AT&T is likewise in the midst of building its own video service designed for cord-cutters, the folks who no longer pay for a cable-TV subscription.

Despite its success, BingeOn has its critics. YouTube, which is not a BingeOn partner, has accused T-Mobile of degrading the quality of its video streams, while advocacy group Electronic Frontier Foundation called out T-mobile for throttling the video traffic to all of its customers, regardless of whether they were taking part in BingeOn.

The Federal Communications Commission is looking into whether the program plays favorites in a potential violation of Net neutrality.

It's tough for T-Mobile to understand such criticism, given that consumers are benefiting from the service. They get more video to watch without fearing they've used up their monthly data.

Despite the benefit, critics say T-Mobile's program selectively chooses winners by giving certain companies the right to broadcast video without eating into customer data. T-Mobile continues to defend the program, arguing that any company can join.

BingeOn is "completely compliant" with Net neutrality, CEO John Legere said in November.

Correction, 5:17 a.m. PT: T-Mobile's fourth-quarter earnings beat Wall Street expectations.

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