T-Mobile closes on Layer3 TV purchase

T-Mobile CEO John Legere (T-Mobile)
T-Mobile has promised disruption—disruption!—for the pay TV industry with the wireless company's purchase of startup Layer3 TV, which closed today. (T-Mobile)

T-Mobile announced today that it has closed its acquisition of pay TV startup Layer3 TV, just about five weeks after first touting the deal.

No deal terms have been announced. 

The wireless company said last month that it plans to launch a “disruptive” video service based on the back of Layer3 TV. The startup specializes in managed delivery of video over IP network and is targeting an upscale market that wants a traditionally large pay TV bundle but craves better service and premium equipment. Denver-based Layer3 TV launched in several markets over the last 18 months, including Los Angeles and Chicago. 

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RELATED: T-Mobile’s Layer3 buy vexes analysts

T-Mobile, meanwhile, also codified its new “TV team,” which will be led by Layer3 TV founder and CEO Jeff Binder, who will operate under the title of executive VP and report directly to T-Mobile COO Mike Sievert. 

The more than 200 employees who work under Binder at Layer3 TV will also be migrated over to T-Mobile, including Lindsay Gardner, the former Fox distribution president who serves as chief content officer at Layer3; Dave Fellows, the former Comcast and AT&T Broadband CTO who is the startup's co-founder and chief technology officer; Amos Smith,the former Time Warner Cable exec who serves as Layer3’s CFO; and Gregg Gragaitis, the former Suddenlink senior VP who works as Layer3’s chief product officer. 

“We know people love their TV, but hate their TV providers,” said John Legere, president and CEO of T-Mobile, in a statement. “But, the reaction to our announcement last month took even me by surprise. People are ready for choice and change! Well, good news ‘cause that’s exactly what we’re gonna bring! I can’t wait to take the fight to big cable and satellite TV on behalf of consumers everywhere!”

While Legere continues to beat the drum of disruption in an industry already roiled by too much competition from virtual MVPDs, analysts are perplexed by the strategy. 

“Isn’t video—or, OTT video, at least—already delivered anywhere?” asked MoffettNathanson analyst Craig Moffett in a note to investors shortly after T-Mobile’s acquisition was announced on Dec. 13. 

“And how, exactly, will T-Mobile’s national wireless footprint fit with Layer3’s city-by-city facilities-based (or partially facilities-based) distribution model? And, more pointedly, why does T-Mobile need to own the video aggregator (or any video aggregator)?” Moffett added.