Sprint CFO Tarek Robbiati took no time to make his feelings known about competitor T-Mobile US.
Speaking for the first time in his new position at Sprint, Robbiati said T-Mobile US’ “Binge On” promotion, which offers unlimited low-quality video streaming for two dozen over-the-top applications including ESPN, Fox Sports, HBO Go, Hulu, NBC Sports and Netflix, was in for a “hangover” due to network issues and spectrum deficiencies.
“The word ‘binge’ is very apropos,” Robbiati said during this week’s Wells Fargo Technology, Media and Telecom Conference. “It looks like a hangover is going to come at some point.”
Robbiati believes the T-Mobile US plan will have a “fundamental issue with network congestion,” which will hamper the service, adding Sprint doesn’t have that problem due to its large cache of 2.5 GHz spectrum.
Speaking at the same conference, AT&T CEO of Mobile & Business Solutions Ralph de la Vega, also expressed his feelings about the unlimited video promotion. “When you give people unlimited, they use it in a significant way,” he said.
Unsurprisingly, de la Vega believes AT&T’s acquisition of DirecTV gives them an advantage over T-Mobile US’ offer.
“With the acquisition of DirecTV and the combination of our wireless and broadband assets, we have the unique capability to deliver any video that the customer wants over any device, in a very affordable way,” de la Vega said.
A senior analyst with Wells Fargo Securities also has reservations about the offer. “We do have concerns as to what such usage could do to [T-Mobile US’] longer-term network capacity,” Wells Fargo Securities senior analyst Jennifer Fritzsche said in a research note. “We hate to say it, but we have seen versions of this trend before. In our view, if customer usage soars, the benefits in terms of customer adds and lower churn could be offset if the network does not live up to expectations.”
T-Mobile US CEO John Legere seems unconcerned, touting the offer as a revolutionary offer his competitors can’t match.
“Only T-Mobile would find a way for customers to watch unlimited HBO, Hulu, Netflix, Sling TV and more … without eating into their LTE data, while the duopoly is squeezing consumers with overage fees and over-buying,” Legere said in a statement.
The T-Mobile US service also includes Verizon Communication’s Go90 and AT&T’s DirecTV streaming services. T-Mobile claims the Binge On technology provides a three-times improvement in network capacity, noting consumers watching video content not part of the free package will be able to consume three times as much content for the same allotment of data.
