T-Mobile is currently selling TV services from Layer3 in four different cities, including Longmont, Colorado.

I live near Longmont, so I drove over to one of the carrier’s stores there to see it.

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I visited one of three T-Mobile stores in Longmont. There were no signs for the service outside the store, but the carrier had a prominent display of the service inside the store. The display was against the right wall of the store, next to the display for phone chargers.

The display was branded as Layer3 TV, and featured two of Layer3’s set-top boxes and a Layer3-branded remote control. The bigger box was designed to connect to a customer’s primary TV, and the smaller box was designed to connect to other TVs in a customers’ home, like in the bedroom. A T-Mobile representative said that the smaller box for additional TVs cost an extra $10.

I spent a few minutes surfing on the TV using the remote control and was able to quickly switch channels and watch shows. Some TV shows offered an option to view previous episodes of that show. And the option to use a digital video recorder to record a show was prominent in the interface.

A T-Mobile salesperson in the store said that the service was available for $90 per month for customers who already subscribed to T-Mobile’s service, or $110 per month for customers who do not subscribe to T-Mobile’s service. The representative explained that the Layer3 TV offering provided pretty much every cable channel available except premium channels like Cinemax and HBO, as well as local TV channels (premium channels were available for extra, the salesperson said). The representative said that T-Mobile is selling the service at just one price point—$90 per month for T-Mobile customers—instead of through multiple and potentially confusing pricing tiers that include different collections of channels.

Here is the brochure the representative offered on Layer3’s services:

The brochure noted that the service is only available to customers who subscribe to internet services through Longmont’s NextLight internet service provider—which also aligns with Layer3’s ISP-by-ISP approach to the TV market.

And that was about it.

Basically, the Layer3 display in the Longmont store was just that: A demonstration of the TV service Layer3 offered prior to T-Mobile’s acquisition of the company late last year. T-Mobile has promised to launch a TV service based on Layer3’s offerings sometime this year; that service is expected to be branded as “T-Mobile TV.”

Extended testing

It’s not clear how different “T-Mobile TV” might be from Layer3’s existing TV services. But the fact that T-Mobile is currently selling Layer3 TV services in Longmont and three other markets in the United States may well indicate that T-Mobile’s forthcoming service (rumored for a November launch) won’t be much different than Layer3’s existing service.

As reported by Wave7 Research, T-Mobile stores in Dallas, Chicago, Washington, D.C., and Longmont are all selling Layer3 services. Wave7’s Jeff Moore noted that T-Mobile is using a “bake off” strategy by testing different pricing scenarios at different locations to see how they perform.

And, according to a detailed report by S&P, Layer3’s service is generally more expensive than services from other video providers. The publication noted that, on Layer3’s website, the company’s Platinum allHD package—the smallest and least expensive—goes for $80 a month for T-Mobile customers and $100 a month for others. In other ZIP codes where a T-Mobile bundle is not promoted on the site, Layer3's Platinum allHD package starts at $90 a month.

The publication noted that customers can increase the size of the package to 275 channels by adding various premium and sports services, such as an HBO bundle for $15 a month. The price can rise to up to almost $150 per month.

As the publication noted, those prices are well above what others in the space are charging. For example, in Chicago, Comcast is charging $80 per month for 220 channels, or $120 for 260 channels, including HBO, Showtime, Starz and Cinemax. Similarly, Comcast's 100-channel Digital Economy Package starts at $30 per month for the first 12 months, and AT&T’s DirecTV Now goes for $40 a month. AT&T’s Watch TV starts at just $15 a month.

(Indeed, T-Mobile warned in a regulatory filing earlier this year that Layer3's content acquisition costs are 20% to 30% higher compared to its larger rivals for the same programming.)

Nonetheless, Layer3’s Jeff Binder promised earlier this year that T-Mobile’s forthcoming service would be disruptive. He did not provide details about exactly how.

A further indication of T-Mobile’s TV plans comes from the job listings the company has posted for its new Home and Entertainment business segment. The job postings include a range of positions including installation managers, cloud DVR operators and CDN administrators.

The carrier’s Home and Entertainment site also offers T-Mobile CEO John Legere’s take on T-Mobile’s acquisition of Layer3:

Plenty of competition

If T-Mobile does launch a Layer3-powered “T-Mobile TV” service in November as expected, the company will be entering a crowded market. Providers like Sling TV, Hulu Live TV and YouTube TV already provide live TV over the internet, while HBO and Netflix offer a variety of premium TV shows. Further, additional companies are expected to enter the fray soon, such as Disney’s planned OTT service.

The situation has led some providers to bail from the space altogether. Verizon, for example, outsourced its TV offerings to Apple TV and YouTube TV for its 5G Home fixed wireless internet service. And even TV stalwart Charter has said that its video service “isn’t a standalone product in its current situation,” indicating that the longtime cable company is no longer pursuing the video market apart from its efforts to sell internet services.

All this raises the question: Is there space in the fractured TV market for a new provider, particularly one that could leverage T-Mobile’s momentum in the wireless market? That’s certainly the strategy AT&T is using by bundling its DirecTV Now and Watch TV services with its own mobile offerings.

The problem is that T-Mobile may have set expectations too high. “No market needs Un-carrier-ing more than pay TV, so we’re completely stoked to join T-Mobile in disrupting the status quo!” Binder said last year in a release announcing T-Mobile’s acquisition of Layer3. “Together with T-Mobile, we’re going to ditch everything you hate about cable and make everything you love about TV better.”

Making T-Mobile’s mobile service more compelling by adding a video offering is certainly a worthy and attainable goal. Fixing the cable industry, on the other hand, feels like a tall order. — Mike | @mikeddano