In an effort to lure more subscribers, T-Mobile US Inc (NASDAQ:$TMUS) stated on Wednesday that it has partnered with Netflix Inc (NASDAQ$NFLX) to offer a free subscription to the video streaming service with its unlimited data family plans.
The new partnership echoes the trend of consumers utilizing their cell phones to stream content. Wireless carriers are bundling content with mobile services as a way to attract and keep customers in the United States.
Perhaps the first to start the trend earlier this year, At&T Inc (NASDAQ:$T) bought out Time Warner Inc (NASDAQ:$TWX) for a cool $85.4 billion in hopes of transforming itself into a media powerhouse. The company offered HBO in its Unlimited Plus wireless plan.
T-Mobile, which is the No. 3 U.S. wireless carrier by subscribers, has slowly but surely been vying for shares from larger rivals AT&T and Verizon Communications Inc. (NASDAQ:$VZ) through cheaper prices and added features.
As of afternoon trading, Verizon and AT&T shares decreased by around 1.3% while T-Mobile shares increased by 0.11%. Netflix also increased by 2.2%.
An analyst at BTIG, Walter Piecyk stated that “T-Mobile is in an enviable position for the future communications landscape by building the bundle from scratch, without having to sustain legacy businesses that are in structural decline.”
Netflix is in a similar position, rendering the perfect, high profile partnership.
Looking at the deal in closer detail, T-Mobile One customers who have two or more lines to get a standard Netflix subscription, normally priced at $10 a month, for free as part of an exclusive, long-term agreement that the company struck with Netflix. For a family of four, the plans cost $40.
It is worth noting that T-Mobile’s Chief Operating Officer stated that “Netflix is not providing us with a giant discount.” This means, in establishing this partnership, T-Mobile is prioritizing subscriber benefits over revenue.
Featured Image: twitter
