Cox: It’s About the Bundle
Cox Communications will be at least the seventh provider to launch wireless service in San Diego – and that’s just at first count. The cable company’s move into the wireless space begs the question: Does it really intend to compete against the likes of AT&T, Verizon Wireless and Sprint?
The answer, provided by the company’s vice president of wireless, Stephen Bye, is both yes and no. Bye doesn’t see the company’s move into the wireless space as a move to directly take on carriers: After all, building a nationwide cellular network is no small task. Instead, Bye says that Cox took on the wireless space to provide a “mobility distinction” to its service bundles.
“The bundle is very important to us,” Bye says. “We were one of the first to offer bundled services back in 1997. We’ve had a lot of experience as pioneers.”
Cox is indeed a pioneer, at least when it comes to what it’s doing in the wireless space. The company is the only U.S. cable provider to build its own wireless network. Other companies, namely Bright House Networks, Time Warner Cable and Comcast, are partnering with Clearwire to resell its mobile WiMAX service.
The initial Cox CDMA deployments are in Hampton Roads, Va., Orange County, Calif., and Omaha, Neb. Cox says it will eventually expand the workforce in its CDMA markets by 20 percent as well as roll out enterprise-class wireless service. The company’s 3G service is currently only available to residential customers. Cox’ recent LTE tests were conducted in Phoenix and San Diego with the help of Huawei and Alcatel-Lucent.
Bye says that wireless services, particularly wireless data, provide Cox with a chance to expand its service offerings. “Mobile broadband is a fairly nascent market,” he says. “This is not about playing defense. This is a growth opportunity.”
ABI Research analyst Dan Shey doesn’t buy Cox’ “growth opportunity” rational. “It seems to me that they’re just trying to dislodge a little bit of the competition from their own customer base,” he says. “They’re well behind the game [but] there’s still a lot of upside in mobile data.”
Shey points out that Cox and other cable providers are facing increased competition from AT&T and Verizon’s respective U-Verse and FiOS home television services, which the carriers bundle with home Internet, phone and cellular service. Mobile data could be a bright spot for cable providers, hence the various partnerships with Clearwire and Cox’ move into LTE.
“They see the addition of wireless as a way to secure their position against AT&T and Verizon, who are launching their own television services,” Shey says. “They’re leveraging what they already have,” which is both content and an existing customer base.
Bye disagrees that Cox’ move into wireless was prompted by competition from AT&T and Verizon, reiterating his point that the company’s move is “not about playing defense.”
Bye insists that Cox is simply responding to customer demand and points out that Cox is coming in at what he terms “the beginning wave of adoption for mobile data. “As opposed to coming in as a new entrant, we have an established customer base,” he says. “It’s not like we’re a greenfield operator.”
How successful Cox will be at the wireless game is anybody’s guess. Iain Gillot, founder and president of iGR, says the future of cable’s gamble on 3G and 4G is unclear. “To be perfectly honest, it’s an open question,” he says. “The cable guys have tried for a long, long time to get into wireless.”
This time, perhaps they’ll be successful.