Cox goes heavy and light with new tiers
Cox Communications Tuesday became the latest MSO to formally ratchet up speeds for its flagship and premium cable modem tiers. The operator also bowed a value tier that will be openly marketed to dial-up Internet users.
Cox boosted its flagship "CHSI Preferred" package to 4 Mbps down/512 kbps up, calling it the fastest Internet service to be found for under $40 a month (it's $39.95 per month when bundled with other Cox services). Previously, Cox capped its Preferred tier at 3 Mbps down/256 kbps up.
The Atlanta-based operator is coupling the speed boost with a marketing campaign under the tagline "Fast is Beautiful" and a Web site that demonstrates the advantages of cable modem connections.
Cox also introduced a "Value" package (256 kbps symmetrical) for $24.95 per month. "Lite" tiers are traditionally used by cable operators as a save tactic and not marketed openly. Cox, instead, will target the offering to subs "concerned more with price than speed and features" and use it to convert dial-up Internet users.
At least one analyst believes Cox's move to offer a low-end tier as a standard option could "spook" cable investors and spur fears that price competition with DSL is making a real impact.
Richard Greenfield of Fulcrum Global Partners said in a research note that the move could indicate that Cox fears a sustained slowdown in new signups for its flagship $39.95 offering. He also viewed the move as a direct attack on AOL's $23.90 per month narrowband service.
But Cox is also targeting high-end, power users with a "Premier" tier (5 Mbps up/768 kbps down) for $54.95 per month when bundled with other services.
Cox is not yet offering the faster speeds across the board. The MSO noted that subs in Las Vegas, Nev.; Gainesville, Fla. and its Middle America Cox (MAC) markets won't obtain access to the new tiers until later this year.
Cox said its business services division will launch speed increases and a "service enhancement initiative" sometime next week.
"In this highly competitive marketplace, it's important for us to constantly look for ways to evolve our services to best meet the needs of the consumers," said Steve Gorman, vice president of product management and marketing for Cox High Speed Internet, in a release.
Other MSOs seem to agree. Cox is just the latest in a string of operators to hit the high-speed gas. Among them, RCN Corp. recently upgraded its flagship tier to 5 Mbps, and launched a premium tier that caps downloads at 7 Mbps.