AT&T will launch two new unlimited wireless plans next week that will be bundled with a new video streaming service called WatchTV, in the company's first move to pair entertainment with phone service after closing its $85 billion acquisition of media company Time Warner.
The No. 2 U.S. wireless carrier is putting to use Time Warner's stable of content, including TV channels like TBS and CNN, to drive sales of the wireless plans at a time when carriers have struggled to find growth.
"This is the first step to transforming how content is created, distributed and consumed," David Christopher, president of AT&T mobility and entertainment, said in an interview.
WatchTV, which will have over 30 live channels but no sports or local news channels, will be free for customers of the new wireless plans. It will cost $15 per month as a standalone product. Customers who sign up for the higher-priced wireless plan can also get HBO for free, the premium TV channel with the hit show "Game of Thrones" that AT&T acquired as part of the Time Warner deal.
A federal judge earlier this month approved the merger of AT&T and Time Warner, handing AT&T a win after the U.S. Department of Justice sued to stop the deal, saying a merger would give AT&T unfair leverage over rival pay-TV providers.
AT&T, like other pay-TV providers, has been losing linear TV subscribers as viewers "cut the cord" on satellite TV packages in favor of cheaper streaming options. In the first quarter, AT&T shed 187,000 linear video subscribers.
The company also lost 22,000 wireless customers who pay a monthly bill during the first quarter, and while it was an improvement from the 348,000 customers it lost the previous year, continued losses have pressured AT&T to find ways to grow the valuable wireless business.
WatchTV as a standalone product will compete with other low-cost video streaming options, including Dish Network's Sling TV, which costs $20 for the base package, and Philo, which costs $16.
WatchTV's channel lineup, which includes AMC, HGTV and TNT, could appeal to viewers who do not have a large cable package or are looking to further "trim the cord," Christopher said.