T-Mobile has announced that it will be giving away a free subscription to Netflix for those customers who have subscribed to its unlimited data plans with at the minimum two lines activated on the plan. This was revealed by John Legere, the chief executive officer of T-Mobile, in a video. Both current and new customers will be offered a standard Netflix service at no extra cost. The cost of a standard Netflix service is around $10 per month.
T-Mobile did not disclose the terms of the deal though Mike Sievert, the carrier’s chief operating officer, revealed that the telecom giant is getting a small discount from Netflix. According to Braxton Carter, T-Mobile’s chief financial officer, the cost of offering Netflix free to subscribers won’t have an effect on the earnings forecasts of the carrier.
The development demonstrates the extent to which mobile networks are ready to go in their bid to lure new customers. The price promotions and giveaways are only likely to increase ahead of Apple’s launch of the latest iPhone. In the recent past AT&T has introduced an unlimited HD plan where subscribers are charged a monthly fee of $145 and among the benefits is a free subscription to HBO. Sprint has also been offering a free subscription for half a year to music streaming service Tidal. Earlier in the year Sprint reached a deal to purchase a 33% stake in Tidal which is owned by rapper Jay-Z.
The giveaways by the carriers reflect a trend where the players in the sector are opting to increase the number of features they offer to their subscribers instead of slashing prices. It will remain to be seen whether that trend will continue when Apple launches the iPhone on September 12 which is the same day that the free Netflix offer from T-Mobile will go into effect. Apple’s previous iPhone launch led to the four largest wireless carriers in the United States offering freebie phones and this resulted in their out-of-pocket expenses swelling.
For Netflix this is not the only deal it has made with carriers in the recent past in a bid to boost its subscriber numbers. Wireless carriers in Europe such as SFR Group SA and Vodafone Group Plc have inked deals offering Netflix in their subscription packages. In the deal with T-Mobile, Netflix will also benefit from increased exposure.
“The marketing dollars that T-Mobile will spend promoting this offer will also be a clear benefit to cementing Netflix as one necessary source of content in the future of consumer consumption,” said Walt Piecyk, a BTIG LLC analyst.