AT&T to Give Free HBO to More Wireless Customers

By Drew FitzGerald Features Dow Jones Newswires

AT&T Inc. said it would offer free HBO service to more of its wireless subscribers, as video streaming giveaways become the latest front in the fight for cellular customers.

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On Tuesday, the cellphone giant said customers on its midmarket Unlimited Choice wireless plans will get HBO free starting Friday. The company has offered free HBO to subscribers on its more expensive Unlimited Plus plans since earlier this year.

"This is how we move down market," Chief Executive Randall Stephenson said at an industry conference, noting that any plan that keeps communications customers from leaving makes the overall business more profitable.

Rival T-Mobile US Inc. recently said it would provide free Netflix Inc. accounts to subscribers on its unlimited family data plans.

AT&T is promoting HBO content even as it awaits regulatory approval for its proposed takeover of Time Warner Inc., which owns HBO as well as CNN, sports-heavy Turner channels and movies from the Warner Bros. studio.

Mr. Stephenson said AT&T will run Time Warner's media business as a "self contained" unit insulated from the needs of its new corporate parent.

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"I know very little about running a media company," Mr. Stephenson said at the Goldman Sachs conference in New York. "Running a media and entertainment company is very different from running a communications company."

Still, the AT&T CEO said he expects the deal to yield a meaningful amount of new revenue from advertising. The merged businesses should also be able to cut costs by combining information-technology operations and using data on viewing habits to choose what shows and movies to invest in next, he added.

AT&T's takeover of Time Warner, worth $85 billion when it was launched last year, still needs approval from the U.S. Department of Justice and regulators in Brazil. Mr. Stephenson said the company has so far run into no surprises and still expects the deal to close by the end of this year.

Mr. Stephenson also said he expects the company to be "well down the path" of building a new advertising platform in the coming months. AT&T has said it can earn several times above going rates by selling video ads tailored to specific groups of customers based on demographic information and what they watch.

"We have placed a high value on this data," Mr. Stephenson said.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

September 12, 2017 10:39 ET (14:39 GMT)