Sprint (NYSE: S) and AT&T (NYSE: T) executives discounted T-Mobile US' (NYSE:TMUS) newly announced Binge On streaming video service that the operator will offer to all its customers who subscribe to 3 GB or higher data plans for no extra charge, warning that the service will cause network congestion and deliver poor quality video.
De la Vega
At the Wells Fargo Securities Technology, Media & Telecom investor conference, Ralph de la Vega, president and CEO of AT&T Mobile & Business Solutions, warned that T-Mobile's Binge On will cause congestion in the network. "When you give people unlimited, they use it in a significant way," he said, adding that he believes that AT&T can offer a much better video experience because of its integration with DirecTV, which it purchased earlier this year. "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," he said.
De la Vega added that AT&T's video is high quality, a slam against T-Mobile, which is using a proprietary adaptive bit-rate technology that the company said will reduce the strain of video on its network by making video streams smaller.
He also noted that his competitor is raising the rates of its unlimited data service from $80 per month to $95 per month to accommodate the video service. "I think the more interesting aspect is that they had to either drop the data buckets or raise the prices. As a result of that, they get the added benefit of offering lower quality video on a free basis," de la Vega said.
Speaking at the same conference, Sprint CFO Tarek Robbiati also knocked T-Mobile's Binge On service. "I think the word 'binge' is very apropos," he said. "It looks like a hangover is going to come at some point."
Robbiati also said the "fundamental issue" with the Binge On plan is network and spectrum capacity, which he suggested will eventually become congested and hamper the service. "We don't have that issue," he added, noting that thanks to its trove of 2.5 GHz spectrum, Sprint has more spectrum than any other carrier in the market.
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