T-Mobile taunts AT&T's DirecTV Now with free Hulu promotion

T-Mobile CEO John Legere (T-Mobile)
T-Mobile CEO John Legere. Image: T-Mobile

T-Mobile is calling out the performance of DirecTV Now with a promotion offering a free year of Hulu to former AT&T users who’ve already made the switch.

The nation’s No. 3 carrier last month began targeting AT&T customers with a free year of basic DirecTV Now—which currently costs $35 a month—to customers who switched and activated two lines of service. T-Mobile’s new promotion sweetens that deal, giving those users a year of Hulu in addition to DirecTV.

Which gives T-Mobile a chance to knock the performance of AT&T’s new OTT video service.

“It turns out DirecTV Now is barely watchable, but we’ve got our customers’ backs,” T-Mobile CEO John Legere said in the carrier’s announcement. “So, every former AT&T customer who took us up on our offer now gets a free year of Hulu on us—and they get to enjoy it on a faster, more advanced network with unlimited data.”

The offer applies to Hulu’s limited commercials service, the company’s entry-level offering that typically sells for $8 a month. An AT&T representative declined to comment on the promotion.

AT&T launched DirecTV Now on Nov. 30 in an ambitious effort to expand its media offerings, but the service has clearly failed to live up to the hype. Customer frustration has risen due to billing and authentication problems, and The Verge recently reported there are more than 200 active forum threads on AT&T’s website complaining about technical issues.

Nonetheless, the offering appears to be gaining traction among consumers. UBS analyst John Hodulik said last week that DirecTV Now “is holding up better than its peers since launch,” seeing more app downloads than Dish’s Sling TV, Verizon’s Go90 and Showtime’s streaming service during that time. Only HBO Now saw more app downloads, Hodulik reported.

It's worth noting that Hulu is in part owned by Time Warner, the media giant that AT&T is working to acquire in a $85.4 billion transaction announced last year. AT&T's pending purchase of Time Warner, along with its stake in Hulu, reflect the increasingly fractured and complex nature of the telecommunications industry.

T-Mobile’s offer comes ahead of AT&T’s quarterly earnings report, which will be delivered after the markets close today.