Signage for an AT&T store is seen in New York October 29, 2014. REUTERS/Shannon Stapleton/File Photo

(Reuters) - AT&T Inc T.N, which is buying Time Warner Inc TWX.N, said it plans to reinvest more advertising revenue into content as it goes head-to-head with online streaming services such as Netflix Inc NFLX.O.

AT&T also said it would now offer Time Warner’s premium cable channel HBO, home to hit shows such as “Game of Thrones” and “Veep”, to all customers on unlimited plans at no additional cost. The No. 2 U.S. wireless carrier in April offered free HBO to some customers on unlimited mobile data plans.

Time Warner has been struggling to keep viewers glued to its channels as they flock to Netflix and Amazon.com Inc's AMZN.O Prime Video, a trend that is taking a toll on ad sales.

The media company posted a 6 percent drop in ad sales in the latest quarter, which it attributed partly to having fewer NBA and high-profile college basketball games than a year earlier.

Time Warner has a great brand in HBO and the merger will allow it to leverage HBO to reach more subscribers, AT&T Chief Executive Randall Stephenson said at the Goldman Sachs Communacopia Conference in New York on Tuesday.

Stephenson said he wanted to offer advertisers the same degree of targeting they would get from digital platforms. “The advertising opportunity we think is significant,” he said.

Together, the two companies have 1 trillion impressions per year. Ad impressions, or ad views, is a metric for the number of times an ad is displayed on a web page.

Stephenson said AT&T was confident about closing the Time Warner deal by the end of the year.