T-Mobile allows streaming video without drawing against data limits

T-Mobile US said it will allow customers to stream video from 24 media sources, including Netflix, HBO and Hulu but not yet YouTube, without counting it against their monthly data limits.

The feature, called Binge On, still requires customers to subscribe to pay for video services such as Netflix, similar to T-Mobile’s earlier programs to allow data-free music streaming.

T-Mobile’s video and music streaming moves, along with others, helped it attract more than 1 million new monthly subscribers in each of the past five quarters. It passed Overland Park-based Sprint earlier this year and became the nation’s No. 3 wireless carrier. The moves also have cut T-Mobile’s profit margins to almost half those of Verizon.

T-Mobile also announced changes in the data available under its Simple Choice plan.

“These are some bold moves by T-Mobile,” analyst Mark Lowenstein wrote in his Lowenstein’s Lens on Wireless newsletter. “They will help keep the net (subscriber) add momentum going for the company for the next few quarters, at least.”

Mobile video has become a big focus for U.S. carriers looking for revenue growth outside the increasingly price competitive phone service market.

Last month, Verizon started the free video service Go90 and signed agreements with the NBA, the NFL and media partners to stream programming. Verizon is exploring plans to offer a premium subscription next year. AT&T is also working on a mobile video service that could debut next year.

T-Mobile said it worked with the video service providers to optimize video streams so they maintain DVD-level quality on a mobile phone without transmitting as much data.

DVD quality is short of the high definition that many phones are capable of displaying. Analysts disagreed, however, about the importance of that quality level for mobile users.

Analyst Walt Piecyk at BTIG Research promptly noted the limit on the data-free streaming video quality in a post on Twitter but said the difference would “probably not (be) distinguishable on an iPhone.”

Meanwhile, a tweet from Jan Dawson of Jackdaw Research said the DVD quality “could look subpar on today’s devices.”

Existing customers will automatically get the deal when it starts next week. They also can turn the feature on and off. Unlimited video streaming is restricted to those who have data plans of at least 3 gigabytes per person.

This story was originally published November 10, 2015 at 4:14 PM with the headline "T-Mobile allows streaming video without drawing against data limits."