Cox Cable to Jump Into Cellular Fray

Cable television provider Cox Communications plans to roll out its own cellular network some time in 2009 in an effort to take market share from telephone companies and wireless operators.

The Atlanta-based company has already spent US$550 million to acquire wireless spectrum so it can offer cellular service to its customers. That spectrum covers Atlanta, Las Vegas, New Orleans, San Diego, and Omaha, Neb. -- as well as much of Kansas and southern New Mexico.

Cox already offers the so-called triple play bundle of voice, video and high-speed Internet services. Its competitors include Cable Vision Systems, Verizon, AT&T (NYSE: T) and Time Warner (NYSE: TWX) Cable.

Convergence and Mobility

"We obviously recognize that convergence and mobility are two thing consumers are embracing more and more each day," David Grabert, a Cox spokesperson, told the E-Commerce Times. "So it's important for service providers in [the digital cable, Internet and voice] businesses to enable customers to take those services with them wherever they go. It's an opportunity to grab a piece of the wireless pie, and also to increase the value of our existing bundle of services."

Cox's initial focus will be on signing up as many of its customers as possible for its new wireless phone service.

"The customers who will be most drawn to us are our existing customers," Grabert said. "We have six million customers nationwide and two-thirds of those customers use one or more services we offer. One-third use all three. We're looking at really tapping into that market."

The new cellular network will also enable Cox to target new customers, he said.

Mum on Details

Cox didn't provide much information as to exactly when in 2009 it will make the new cell service available, which markets it will target for initial rollout, whether it will charge roaming fees, or whether it will subsidize mobile phones.

Nor has Cox revealed how much it intends to invest in building out its cellular network. AT&T, T-Mobile, Sprint Nextel (NYSE: S) and Verizon Wireless have spent hundreds of millions to billions of dollars over a period of years on their voice and data networks.

It is known that Cox will partner with mobile operator Sprint Nextel for roaming outside of Cox's wireless territory.

"For competitive reasons, we're playing this one pretty close to the vest," Grabert said.

However, Grabert did confirm that a variety of phones will be offered and that all of the data services provided by wireless carriers including AT&T, Verizon Wireless and T-Mobile -- such as mobile e-mail , text messaging and the like -- will be available to Cox wireless subscribers.

Whether Cox will become a major player in the wireless sector is subject to debate.

"This is a way to keep their core customers and not lose them to AT&T, which has a video service," David Joyce, an equity analyst with Miller Tabak, told the E-Commerce Times. "But they're not trying to be a new wireless carrier -- they're partnering with Sprint on this."

Cox, however, might beg to differ on that point.

"We're going to compete in the wireless market place," said Grabert. "Cox is a great competitor. When we entered the land line phone business 10 years ago, we saw a lot of skepticism that we'd be able to take share away from the phone companies. Today, we have more than 40 percent of the market share in some of the markets where we offer voice service."