When it comes to attention grabbers, it’s hard to beat what T-Mobile serves up. The wireless carrier’s move to let subscribers to its 4G LTE network stream music from eight popular services without it counting against their data plan seems like a stroke of sales-driving genius.
And so are the cage-rattling declarations from T-Mobile CEO and President John Legere. “As a committed music freak, I’m personally outraged at the way the other guys are using the music you love to lure you into over-priced plans with sweet ‘promotional offers’ that quickly roll into higher prices or trigger those absurd overage charges,” Legere said during the June Uncarrier event where he unveiled T-Mobile’s plan to offer free streaming music to LTE subscribers. “Music should be free of all that. Music should have no limits. So, beginning right now, you can stream all you want at T-Mobile from all of the top music services. Data charges do not apply.”
Bravo, Mr. Legere. But when will the other streaming shoe drop—namely in the form of unlimited video streaming over 4G LTE?
Don’t hold your breath there, whether it’s from T-Mobile or any other carrier. While a carrier like T-Mobile may have excellent reasons to offer unlimited audio streaming to its subscribers, that rationale doesn’t necessarily apply to video.
The case for unlimited music streaming
Why did T-Mobile remove data limits on music streaming? Essentially, because it could.
“[T-Mobile] has much more capacity than any of their national competitors at the moment,” said Jonathan Chaplin, an analyst with New Street Research. “Second, they will have done the analysis on the likely increase in usage and they must have concluded that it won’t be too taxing on the network.”
T-Mobile confirmed that was the case when we contacted them via email. “Our network design is built Data Strong—and uses higher frequency (higher band) spectrum with more towers to provide a larger pipe ideal for moving data,” a spokesperson said. “Because of our network design, we are uniquely suited to provide the Music Freedom experience without straining our capacity.”
There are limits, of course. Unlimited streaming is only available through iHeartRadio, iTunes Radio, Samsung’s Milk Music, Pandora, Rhapsody, Slacker, Spotify, and SFX’s upcoming Beatport music app at present, though T-Mobile is taking feedback on what other streaming music services it should support going forward. The other more noteworthy catch—such as it is—is that you must be on T-Mobile’s 4G LTE network to take advantage of unlimited music streaming. And that fits nicely with the carrier’s business strategy.
“As T-Mobile is expanding its 4G LTE capacity, it is shifting throttled 2G data from its lower tier plan users to its LTE network where its capacity per subscriber—based in particular on a lower subscriber base than AT&T and Verizon Wireless—is higher than other carriers at the moment,” said Susan Welsh de Grimaldo, Strategy Analytics’ director of wireless operator strategies. “It is more cost-effective to deliver data over 4G LTE, and T-Mobile has congestion management policies in place to handle traffic when congestion becomes an issue.”
Why video’s different
So if offering unlimited music streaming on its 4G LTE network is a smart business move for T-Mobile, why not do the same thing with video? Because, put simply, video is a bandwidth hog. And while a wireless carrier could find ways to let users stream video without it counting against their data plan, it would be hard to make money doing so, even in today’s 4G LTE network environment.
“When asked if T-Mobile would do the same for video, Mr. Legere said they are ‘open to moving people to our unlimited plan’ to handle demand for video,” Welsh de Grimaldo said. “T-Mobile, like the other carriers, is monetizing video traffic by moving people to higher tier plans if they want to watch more video.” To that end, she noted, T-Mobile increased the price of its unlimited 4G LTE data plan by $10 to $80 per month earlier this year.
What other carriers might do
So if unlimited video streaming isn’t in the cards any time soon, can we at least look to other wireless carriers to follow T-Mobile’s lead and free up streaming music from counting against your monthly data limit? It depends who you’re talking about.
“Sprint can easily do this when they get their 2.5GHz spectrum deployed,” New Street Research’s Chaplin said. “At that point Sprint will have more capacity than any of the carriers and this is exactly the kind of offering they will launch to take advantage of this. I doubt we will see AT&T or Verizon do anything that didn’t involve additional revenue from a different source.”
But unlimited streaming video is likely out of the question, analysts say. “I expect U.S. carriers will be reluctant to adopt a similar approach for mobile video given it is more bandwidth-intensive than music,” said Nitesh Patel, Strategic Analytics’ director of wireless media strategies. And that’s unlikely to change until wireless networks upgrade sufficiently to handle streaming video’s demands as easily as T-Mobile can currently manage audio streaming’s needs.