AT&T's Stephenson teases carrier's plans to leverage DirecTV content for upcoming mobile video service

AT&T (NYSE: T) is preparing to launch a video service that will be delivered to mobile devices as well as residential TV sets, Chairman and CEO Randall Stephenson said today.

"Within 30 days you're going to see us announce some new capabilities, some new products and pricing," Stephenson told attendees at an investor conference. "(We've) put together a really premium content package with our premium wireless asset."

The offering will feature premium content including movies, live sports and TV shows from DirecTV, which AT&T acquired earlier this year. That deal brought AT&T streaming rights it didn't previously have, Stephenson said, enabling the operator to deliver a multi-platform video service.

"When customers buy DirecTV, they're buying a big bundle of content," Stephenson said. "And that big bundle of content we're delivering in one of two ways. One is streaming that big bundle of content into the home with a high-quality, high-definition stream to five or six TVs in the home. That's a very known business model. But we'll also stream -- we are streaming -- to a mobile device.

That includes content from channels such as HBO and Showtime, Stephenson said, adding that 30 million U.S. homes don't have a pay TV subscription. "We've got those with stacking rights and mobile rights," he explained. "This is a big deal, OK?"

The carrier is deploying 40 MHz of contiguous nationwide spectrum to support the service, he said. AT&T has also entered into a joint venture with The Chernin Group called Otter Media, with the intent to create content for streaming video services.

AT&T's plans are noteworthy considering Verizon is ramping up the marketing on its new Go90 mobile video service. Verizon's CFO recently confirmed Verizon would offer four business models through Go90: free, ad-supported content; sponsored content where the data is free to access for Verizon's mobile customers; pay-per-view content; and content accessible through a monthly fee.

Stephenson also discussed the enterprise market, which "is where all our growth in mobility is coming from." Enterprise is the top wireless priority for AT&T, he said, and two keys to that market include enabling secure access from the mobile device to the cloud and providing a reliable network with a vast footprint.

Finally, Stephenson noted the challenges and opportunities in moving to software-defined networks. SDN is already having "a marked impact on not just capex but opex," he said, but much work remains to be done before the transition is complete. And deploying new technologies isn't the only hurdle.

"This requires a fundamental shift in the capabilities of our workforce. This is probably one of the biggest logistical issues I've taken on in my career," he said. "Getting hundreds of thousands of people reoriented from circuit switches to IP, from dedicated hardware/software combined to virtualized hardware in a network that's managed by software."

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Related articles:
AT&T a 'fundamentally different company' now that DirecTV acquisition has closed
Analysts skeptical on AT&T/DirecTV bundling, think OTT mobile video offer could be coming
Verizon, AT&T to present divergent video strategies during Q3 earnings

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