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AT&T CEO hints at over-the-top mobile video service

AT&T's Randall Stephenson plans to lean on DirecTV relationships to strike new media deals.

AT&T may be the next big player to throw its hat into the online video ring.

AT&T CEO Randall Stephenson says he's a big believer in mobile video. Stephen Shankland/CNET

Randall Stephenson, CEO of the wireless company, plans to take advantage of the relationships that DirecTV, which AT&T is in the process of buying, has built up with media companies so its customers can get video on their smartphones and tablets.

"Our customers are demanding video to be delivered across any device," Stephenson said on an investor conference call Tuesday discussing AT&Ts quarterly results.

AT&T is just the latest company to entertain the idea of offering so-called over-the-top video, or content delivered over an Internet connection instead of a traditional cable line. The shift underscores a further separation between media companies and traditional pay-TV providers, as companies explore new business models. This is good news for cord-cutters, or consumers who have shunned a cable TV subscription in favor of just Internet or broadband service.

Dish Network's Sling TV , which offers a bundle of a dozen cable channels for $20 a month, is seen as the first to break through with a credible alternative to cable TV service. But it won't be the last. Verizon has said it will launch its own over-the-top service later this year.

Now AT&T is joining in on the mix.

AT&T hopes to strike new deals through its pending $48.5 billion acquisition of satellite TV provider DirecTV, which will give the carrier 20.3 million subscribers to add to its own 5.7 million U-Verse TV customers. More important, it will give AT&T the relationships and clout it needs to negotiate more online content deals for its customers. Stephenson said he expects the takeover to be completed in the first half of the year, and added that mobile television is a top priority.

Stephenson also talked about Otter Media -- AT&T's joint venture with the Chernin Group to acquire, invest in and launch online video services -- as a way to deliver online content.

"I expect customers to walk out the door with content on their mobile device," he said, noting that he's looking at multiple channels and channel lineups that could be delivered to tablet, smartphone and broadband customers. "Stay tuned."