TECH

Free Netflix Coming for T-Mobile Unlimited Family Plan Subscribers

The bundle may be fading for cable TV subscribers, but it's becoming a thing for mobile phone plans. On Wednesday, T-Mobile said it was giving all family plan subscribers on its unlimited data plans free Netflix service.

The move, which follows AT&T's HBO giveaway in April, could help T-Mobile retain more of the lucrative family accounts just as the wireless business is about to get more competitive when Apple launches new iPhones in a few days. And it could also help Netflix boost the growth of its U.S. audience, which increased 10% for the year ended June 30 to just under 52 million.

New and existing T-Mobile customers with at least two lines will get a standard Netflix subscription—which usually costs $10 per month—for free, the carrier said. And T-Mobile will cover the cost of Netflix for its customers who already subscribe to the video streaming service. The giveaway is the latest in T-Mobile's "uncarrier" marketing promotion that CEO John Legere kicked off in 2013 and that has helped the company attract more new subscribers than all of its rivals combined in the years since.

The standard plan at Netflix allows two users to be logged in at once and includes high-definition but not 4K ultra-high definition content (that's reserved for the company's $12-per-month premium plan). Of course, T-Mobile unlimited plan customers have all video downgraded to DVD quality when watching on their phones, unless they pay an extra $10 per line for the carrier's premium unlimited plan.

The promotion comes after competition has eased in the wireless market over the past few months following a year of fierce battling over unlimited data plans. But competition and customer switching almost always heats up when Apple releases new iPhones and the carriers fall all over themselves to woo Apple (aapl, -0.28%) fans with discounts and special offers.

T-Mobile said it is covering the cost of the Netflix subscriptions, but the expense was already included in its previous financial guidance for Wall Street analysts. "This is a big investment on our part," chief operating officer Mike Sievert said on a call with reporters. "Netflix is not providing us with a giant discount. And they don't have to–they're Netflix."

Offering free Netflix (nflx, +0.94%) marks a change in video strategy for T-Mobile. In the past, AT&T (t, -0.70%) and Verizon (vz, -0.53%) have made special video offerings available to their customers, while Sprint (s, 0.00%) has partnered with streaming music service Tidal. T-Mobile (tmus, +0.16%) allowed its customers to stream video from numerous services without counting against monthly data limits. But with the rise of unlimited plans, and the disappearance of the hated monthly limits, that strategy had become outmoded.

In April, AT&T began giving its regular unlimited data plan customers a free subscription to HBO as well a $25 monthly credit for the company's pay TV services, DirecTV, U-Verse and DirecTV Now. The carrier is in the process of buying Time Warner (twx, -0.40%), which owns HBO, for $107 billion. Despite many merger rumors involving T-Mobile this year, there's little chance it will seek to buy Netflix.

fortune.com