T-Mobile will allow some subscribers to stream video from 24 popular services free, without burning through their data caps.
The nation's third-largest wireless carrier, looking to gain competitive advantage over rivals Sprint, AT&T and Verizon, is giving customers the ability to stream videos on their smartphones and tablets without generating data charges. Subscribers can choose among popular streaming services including Netflix, HBO Now, HBO Go, Watch ESPN, Fox Sports and Hulu.
"Video streams free," T-Mobile CEO John Legere said Tuesday. "Binge on. Start watching your shows, stop watching your data." Legere's offer applies to customers who pay for at least 3 GB of data a month.
The promotion is certain to generate complaints from critics who think it violates net neutrality principles, and implicitly favors video services that have agreements with T-Mobile. But Legere brushed aside net neutrality concerns, arguing that his carrier will treat all video services equally when it comes to delivering their data.
"I make it very clear that we fundamentally believe in a free and open Internet," Legere said onstage, in response to a question from Re/code. "We know the principles — you don't slow down or throttle [content.] We abide by all of that … I think it's the fundamental underpinning of what people who think about net neutrality are concerned about."
Legere said that video providers didn't pay T-Mobile to participate in the promotion. Asked whether the carrier would extend the promotion to video providers who wanted to stream pornography, he said "of course."
A T-Mobile executive said the only requirement the company needed from video providers was a technical one — it needs a digital "signature" that will let T-Mobile identify their content.
Video is growing ever more important to mobile users — particularly younger consumers ages 18 to 29, three-quarters of whom told Pew they watch video from their smartphones. Legere said 57 percent of millennials watch video on a mobile device — "they don't even watch TV," he said.
To be sure, other carriers are hip to the consumer appeal of video. It's part of what animated AT&T's decision to acquire satellite TV provider DirecTV for $49 billion; and Verizon's $4.4 billion deal to acquire AOL.
T-Mobile has been gaining customers faster than its rivals, although doing so sometimes comes at a near-term cost. T-Mobile has been more aggressive than either AT&T or Verizon both in terms of monthly service pricing as well as promotions on new devices. Sprint has also joined the fray in recent quarters, fueling additional price pressure in the industry.
Legere arrived like a rock star at Los Angeles' Shrine Auditorium, walking a magenta red carpet in T-Mobile regalia (Black sweatshirt with magenta lining and T-Mobile logo) and posing for selfies with T-Mobile employees waiting outside the venue.
"We've been watching these devices change right before our eyes," said Legere, holding up an iPhone. "As I said before, all content is going to the Internet and all internet is going mobile. It's happening right in front of us."
Legere, ever the showman, took opportunities to take pot-shots at T-Mobile's rivals — whom he refers to as dumb and dumber — which have been turning over their customers "to us one at a time." Indeed, T-Mobile has posted 10 quarters in which it has gained 1 million net additional customers.
He also announced that T-Mobile would double the data allocations in every Simple Choice plan.
T-Mobile also introduced a concept called Family Match, which abolishes the notion of shared data among family members. Instead of a family of four sharing 6 gigabytes of data, T-Mobile will allocate up to 6 gigabytes of data for every person in the family for $120 a month.
"Sharing is evil. It's evil," Legere said. "People hate sharing their data. I hate sharing everything. It equals overages and overbuying. "