(Bloomberg) -- T-Mobile US Inc. is introducing free data for its customers to stream video from 24 media sources including Netflix Inc., HBO and Hulu to help fuel user growth.
T-Mobile Chief Executive Officer John Legere, poking at larger rivals Verizon Communications Inc. and AT&T Inc., unveiled the Binge On feature that lets subscribers watch videos from selected providers including Verizon’s go90 service without having to pay extra in data charges.
“Customers want reliable video,” Legere said during an event in Los Angeles Tuesday. He criticized the current quality of mobile video and said his rivals are trying to grow by charging users more for video streaming.
To make the video delivery work better, T-Mobile is using what it calls DVD-quality 480p video streaming, a picture resolution that is lower than high-definition standards. The difference in quality isn’t very noticeable on phone screens, Chief Operating Officer Mike Sievert said during the presentation.
The feature adds to earlier promotions like free music streaming, data rollovers and cheap international roaming that have attracted more than 1 million new monthly subscribers to T- Mobile in each of the past five quarters. The company surpassed Sprint Corp. in the second quarter to become the third-largest U.S. carrier. Still, those incentives have put pressure on T- Mobile’s profits and squeezed margins to almost half those of Verizon.
Mobile video has become a big focus for U.S. carriers looking for revenue growth outside the increasingly price competitive phone-service market. Last month, Verizon started free video service go90 and signed agreements with the NBA, the NFL and media partners to stream programming. Verizon is exploring plans to offer a premium subscription next year. AT&T is also working on a mobile video service that could debut next year.
Binge On starts Sunday for customers on Simple Choice Plus plans and within two weeks it will be available to all T-Mobile customers, Sievert said. The media selection doesn’t include YouTube, Amazon.com Inc. Prime and Facebook, which are some of the most popular sources of videos, particularly on mobile devices. T-Mobile executives blamed technological challenges and said they were working to include more partners.
“We’d love to have them in,” Legere said, referring to YouTube. “We’re in discussions.”
In coordination with the Binge On introduction, Dish Network Corp. said it’s offering a 30 percent discount for the first year to T-Mobile subscribers who sign up for its $20 a month Sling TV streaming service.
Additionally, T-Mobile said it will double the data allotments on customer plans at no extra cost.
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