Cox Wireless Is Go for Launch

Cox Communications Inc. is officially back in the wireless business, ready to take on AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), T-Mobile US Inc. , Sprint Corp. (NYSE: S), and a cadre of pre-paid players.

The MSO, which announced its intentions to enter the game back in October 2008, is launching a range of 3G voice and data packages today in three markets: Hampton Roads, Va.; Orange County, Calif.; and Omaha, Neb. Cox serves about 1.45 million cable subs in those markets combined.

To help accelerate its entry, Cox is starting off by leasing access on Sprint's national 3G CDMA network, but is supporting wireless customers via its own core network and systems. Cox is also building a wireless network of its own that will start off as 3G and later migrate to Long Term Evolution (LTE). It's not saying when it intends to start serving customers on its homegrown wireless network.

At launch, Cox will offer five Android-powered phones from High Tech Computer Corp. (HTC) (Taiwan: 2498), Motorola Inc. (NYSE: MOT), and LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , along with two BREW-powered phones from Samsung Electronics Co. Ltd. (Korea: SEC), several other "feature" phones, and a standalone 3G modem. (See Cox Wireless: The Starting Lineup and Cox Mobilizes With Android & BREW .)

On the sub-acquisition front, Cox is starting off by targeting its wireless packages at its most loyal cable customers -- those that already take more than one service from the MSO. Cox estimates that two thirds of its customers take more than one product, and one third subscribe to its cable TV, home phone, and high-speed Internet services.

"From all the research we've done, it's clear we have an opportunity and their permission to bring wireless into the bundle," says Cox VP of wireless Stephen Bye.

Cox's 'Unbelievably Fair' approach
There's no doubt that Cox faces a tall order as it looks to penetrate the über-competitive wireless market.

To help it differentiate, Cox is structuring its voice and data rate plans to allow "easy" comparative shopping and features such as remote DVR scheduling, voice mail to text, and an integrated address book.

As part of its "Unbelievably Fair" customer-acquisition campaign, it's also added something called "MoneyBack Minutes," offering cash back (5 cents per minute up to $20 per month) for unused minutes. It's coupling that with usage alerts that send text messages when subs approach their max minutes or messaging limits for the month. Subs will also be allowed to adjust plans mid-stream.

It's also trying to tightly integrate wireless with its existing cable services. The MSO's "Bundle Benefits" program, for example, offers a free high-speed subs upgrade to the "Premiere" tier (25 Mbit/s down) from "Preferred" (15 Mbit/s) when customers add wireless. Among other options, the program also offers free movie package upgrades and unlimited domestic long-distance calling on Cox's home IP voice service.

For now, Cox isn't offering any guidance on how successful it expects its wireless service to be early on. However, it believes it stands to gain some ground based on the general rule that one in four wireless customers is churning.

"It's very clear that this is a switcher market," Bye says. "We certainly see that as an opportunity as we enter the market to provide customers with an alternative."

Cox will attempt to achieve that goal with the help of 25 retail locations in those three initial markets. All are equipped to handle wireless, as well as the MSO's lineup of video, home phone, and Internet services.

Launch later than expected
Today's launch comes roughly two years after the MSO announced its intentions to take on wireless on its own. It's also launching service about seven months after originally anticipated, but it's not upset. (See Cox Wireless: Soup to Nuts , Cox Finds Friends for 3G Wireless Trials in Omaha , and Cox: Wireless Coming in March .)

"It may be perceived that it's taken us time to get there," says Bye, "but building a new business with this level of complexity and getting it right does take time. The level of the commitment that we have made is not small."

Cox is confident that it's now ready to go, having already tested and run "millions" of messages, data sessions, and voice calls on its platform.

LTE update
Cox has been testing LTE in Arizona and San Diego since January using its Advanced Wireless Services (AWS) and 700MHz spectrum, but isn't saying when it intends to introduce a FauxG service. (See Cox Takes LTE for a Spin .)

That timing will largely hinge on when Cox believes there's a diverse supply of LTE devices. "You really need to have a robust device ecosystem," Bye says. "We'll be in position to be in the market when we feel that we're in a place when that whole ecosystem comes together."

Still, he says he's "very encouraged" with the performance Cox has seen using its spectrum licenses.

Other nuggets about Cox's wireless launch:

  • Although Cox has created a successful commercial services business, its initial wireless focus is on residential customers. But expect that to change. "At a future point we'll offer wireless into that [business] segment as well," Bye says.

  • Cox picked its initial crop of markets because each one is tied to a different, primary wireless competitor. Hampton Roads is Verizon country and Orange County is AT&T, while Omaha has Qwest Communications International Inc. (NYSE: Q) (a Verizon reseller). Cox will also face off with T-Mobile in Orange County and Omaha.

    "We are looking at these [markets] as sort of an incubator to understand the offer and to see how it's going to do. We expect to do very well in our targeted markets," says Keith Davis, Cox's director of marketing for wireless.

  • Cox isn't disclosing when it expect to be ready to introduce wireless into more markets. But if it concentrates on its larger systems, expect San Diego, Phoenix, New Orleans, and Las Vegas to be on the short list.

  • Cox spent more than $550 million for its spectrum licenses. The privately held MSO isn't saying how much more cash it's spent on its wireless project.

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • Jeff Baumgartner 12/5/2012 | 4:17:56 PM
    re: Cox Wireless Is Go for Launch

    Seems they're definitely trying to play up the ties to Cox's other services versus trying to sell wireless as a one-off and being aggressive with low-ball pricing. 'course it won't take long to know how well that strategy is working or not, so we'll have to keep an eye on how pricing evolves.  JB  

    Jeff Baumgartner 12/5/2012 | 4:17:56 PM
    re: Cox Wireless Is Go for Launch

    As apps go, Cox doesn't operate its own "store front," but confirmed it's instead using Android market, offering downloads of the Cox REmote Guide Access app, which provides TV listings and access to the MSO's remote DVR scheduler.  The portfolio also includes BREW-enabled phones. JB



    sarahthomas1011 12/5/2012 | 4:17:56 PM
    re: Cox Wireless Is Go for Launch

    Seems like a good approach for apps. But, I thought we'd see Cox being more aggressive on pricing. Terrible name - "Unbelievably fair" - aside, doesn't seem like a compelling enough service plan to not just use Sprint, which it rides on, instead.

    spc_markl 12/5/2012 | 4:17:55 PM
    re: Cox Wireless Is Go for Launch

    "Who are the ad wizards that came up with that one?" -- and how many millions of dollars were spent.  In some people minds, "unbelievably" may be just on the edge of "implausibly."


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