Cable Operators

Cox Hangs Up on Wireless

11/21/2011 12:01 AM Eastern

Cox Communications’ grand wireless
ambitions have evaporated.

After three years of investment and development,
the Atlantabased
cable operator
is shutting down its
wireless business. The
MSO, which had believed
mobile phones
would be a strong
complement to its triple-
play bundle, announced
last week
that it will stop selling
the services effective immediately.

“It’s hard to call this a surprise,” Sanford
Bern stein senior analyst Craig Moffett said. The
wireless sector is highly competitive and capital
intensive, and “adding one more competitor
to the mix is hardly a recipe to make it better.”

Cox will continue to provide existing wireless
customers service — provided through a wholesale
deal with Sprint Nextel — through March
30, 2012. The company said it will make “special
offers” available to Cox Wireless customers
to shift to another wireless provider.

LACKED SCALE, DEVICES

In a statement, Cox said the decision to no longer
sell 3G wireless service was “based on the
lack of wireless scale necessary to compete in
the marketplace, the acceleration of competitive
4G networks, as well as the inability to access
iconic wireless devices.”

The “iconic wireless devices” apparently
are iPhones, Apple’s best-selling smartphones,
which had been exclusively offered
through AT&T before becoming available this
year through Verizon Wireless and Sprint.

Cox had launched wireless service in less
than 50% of its footprint, including: Hampton
Roads, Roanoke and Northern Virginia; Orange
County, San Diego and Santa Barbara, Calif.;
Omaha, Neb.; Oklahoma
City and Tulsa,
Okla.; and Rhode
Island, as well as Cox
communities in Connecticut
and Cleveland.

Cox’s decision in
2008 to re-enter the
mobile business surprised
some observers,
given that the company
had just participated in the failed Pivot
mobile-phone venture with Sprint, Comcast,
Time Warner Cable and Bright House Networks.

At the time, Cox president Pat Esser said the
MSO’s new approach was different, because it
could better control the billing, provisioning
and pricing of its own service, as compared
with the Pivot joint venture. “We think it’s important
as a communications provider to offer
wireless,” he said in a 2009 interview. “Our
current customers and our next generation of
customers are telling us they want and need
mobility as part of their life.”

AMBITIOUS PLANS

Cox originally intended to own and operate
its own 3G network in certain markets,
and had even contracted with wireless-tower
construction company Berliner Communications.
But in May 2011, Cox scrapped those
plans, announcing it would instead rely solely
on Sprint’s 3G network.

Cox had marketed the wireless service — first
launched in November 2010 — emphasizing a
money-back offer for unused monthly minutes
offering customers a credit of up to $20, with the
tagline, “Unbelievably Fair.” It offered smartphones
from HTC, LG and Motorola Mobility.

The MSO also allowed subscribers who
had at least two services to choose one free
upgrade, dubbed the “Bundle Benefit,” when
they added wireless service: the options included
the Cox Movie Pak, which includes Encore,
Epix, Sundance Channel and Vutopia;
an upgrade from Preferred to Premier highspeed
Internet service; or unlimited domestic
long-distance calls on their Cox Digital Telephone
service.

Cox said all wireless customers will receive
a $150 credit on their bill for every line of wireless
phone service disconnected
and that all
early-termination fees
will be waived. Wireless
customers will
continue to receive
their Bundle Benefit
promotional services
for two years, Cox said.
“Kudos to Cox for
giving it a try,” Moffett
said. “Call it a very expensive
learning experience.
Now, it’s time to
move on.”

CALL DISCONNECTED

TIMELINE OF COX’S WIRELESS EFFORTS:

November 2005: Mobile joint venture (later dubbed “Pivot”) announced by Sprint Nextel,
Comcast, Time Warner Cable, Cox and Advance/Newhouse.

April 2008: MSO partners in Pivot stop selling the service, citing technical complexities
and restrictive wholesale terms.

November 2008: Cox announces plans to build its own 3G networks and offer service
through Sprint, originally slated to debut in 2009.

November 2010: Operator launches service with “Unbelievably Fair” tagline in three markets.
March 2011: Stephen Bye, Cox’s vice president of wireless, joins Sprint as VP of technology.

May 2011: Cox cancels plans to build out its own 3G networks.

November 2011: Cox announces it will phase out wireless service by March 2012.

SOURCE: Multichannel News research

September