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AT&T (T -0.16%) is about to enter into one of its most important deals yet with its proposed purchase of Time Warner (TWX) for $85.4 billion. The deal will make AT&T a major content owner and could allow the company to pair that newly acquired content treasure trove with its strong wireless business. And that should make rival wireless carrier T-Mobile (TMUS -0.13%) just a little bit worried. 

You may already know that T-Mobile currently offers its customers the ability to stream video content from 100 services (like YouTube, ESPN, Netflix, Amazon, etc.) without that streaming going against the customer's monthly data allowance. In return, customers agree to view the content at a reduced quality (usually DVD-quality) and can switch the service on or off anytime they want. 

AT&T recently offered up its own version of zero-rating (when users stream content without using up data allowances) by allowing its customers who are also DIRECTV subscribers to stream content without data usage. But AT&T's streaming offering will become even more of a problem for T-Mobile once the Time Warner deal (likely) goes through. 

Adding Time Warner's content into the mix could potentially allow AT&T customers to stream content from the following providers without data usage being counted against their account: 

  • CNN
  • TBS
  • TNT
  • Cartoon Network
  • Warner Bros. films
  • DC Comics
  • Turner Broadcasting's rights for NBA and MLB games
  • HBO

Now, AT&T hasn't yet confirmed this, because the deal hasn't closed yet (and that's still some time away). And it's worth noting that T-Mobile offers some content from the above list through Binge On as well. But the real problem for T-Mobile here is that AT&T is about to launch its own over-the-top (OTT) streaming TV service -- which will now likely include lots of Time Warner content -- and will outpace anything T-Mobile can offer through Binge On. 

AT&T's DIRECTV Now will launch next month, will be competitively priced against rivals like Sling TV, and will include 100 live channels (something T-Mobile can hardly compete with).

AT&T 1, T-Mobile 0

T-Mobile CEO John Legere played down AT&T's competition with Binge On during the company's Q3 earnings call recently, saying, "The great news is that they are going to be further defocused than they are now, and the upside opportunity to continue to acquire businesses in the space for us is tremendous."

Legere seems to be spinning this news a bit in saying that AT&T will be more unfocused than ever before, and I'm not so sure he's selling it well. AT&T will be soon be in a very strong content provider position both with DIRECTV Now and its Time Warner content. 

Meanwhile, T-Mobile owns none of the content streaming across its Binge On service, and instead relies on content makers to add their content to it. Which, of course, they could stop doing anytime they wanted to. 

That gives AT&T a massive advantage over T-Mobile, and an incentive for wireless customers to strongly consider AT&T's network. The carrier is reportedly looking to grab 20 million subscribers for its DIRECTV Now service, which could essentially help lock in those users to AT&T's network and services.

T-Mobile is certainly growing quickly (it just added 2 million net customer additions in Q3), but it doesn't own the content its users are watching. T-Mobile is starting to look like it could get sidelined in the content business and be relegated to a simple deliverer of content, instead of an owner. Much of the telecom world knows that being a pipeline for content isn't enough these days -- and that's exactly what T-Mobile looks like at the moment.