News

Cox Rings Up Two More Phone Markets

9/13/1998 8:00 PM Eastern

Cox Communications Inc. will introduce Cox Digital
Telephone in two new markets -- San Diego and Phoenix -- the MSO said.

Cox rolled out its first telephone service a year ago in
Orange County, Calif., followed by Meriden, Conn., and Omaha, Neb., late this past spring.

Ultimately, the company plans to make local and
long-distance telephone, as well as video and data services, available in all of its top
10 clusters, according to Ellen East, director of public affairs for Cox.

San Diego joined the digital-telephone list Sept. 5, when
it announced that it was offering Cox Digital Telephone in certain East County
communities. In the Greater Phoenix area, Cox will launch the service to single-family
homes in the east valley suburb of Chandler Oct. 1.

East said markets for the service are determined by which
ones are ready from a technical standpoint.

Demographics played into the rollouts, as well, East added,
noting that Orange County has the highest penetration of personal computers in the
country, making discounted second phone lines attractive to new subscribers.

The San Diego introduction followed four months of
marketing probes and technical tests going back to early this year, said Art Reynolds,
vice president of new-product marketing at Cox Cable San Diego.

By the end of this year, 200,000 San Diego-area homes
should be passed for the new phone service, Reynolds said. By the year 2000, that figure
should reach 750,000 homes.

Until the footprint for the service is fairly large, Cox
will target its marketing efforts geographically, using a combination of direct mail,
telemarketing and direct sales, he added.

Bruce Smith, media-relations manager for Cox Communications
in Phoenix, said the operator has made the phone service available to some apartment
dwellers since last December through partnerships with multiple-dwelling-unit developers.

The October launch to single-family homes will target
40,000 homes passed in the southeast footprint of Chandler. Smith said the footprint will
grow significantly throughout the Greater Phoenix area so that by the end of 1999, Cox
will offer the service to several-hundred-thousand homes there.

Initial marketing efforts for the Chandler launch include
bill inserts to Cox customers, door hangers and some awareness-advertising campaigns,
Smith said.

Pricing on the first line for Cox Digital Telephone
services is "pretty consistently about 20 percent lower than the incumbent RBOC
[regional Bell operating company]," East said, with the second line about 50 percent
lower. Discounts apply for Cox cable customers.

In San Diego, that translates to $9.99 per month for the
first phone line, versus $11.25 from incumbent Pacific Bell. A second line costs $4.99 per
month.

In Phoenix, Cox Digital Telephone costs current cable
customers $11.75 per month for the first line and $6.50 for the second line.

Eventually, the company plans to bundle all of its services
on a single bill.

Reynolds said that in addition to promoting discounted
pricing, Cox is also playing up the fact that San Diego residents now have a choice in
phone services.

"That's important to a lot of consumers," he
added.

Cox learned through extensive consumer research that its
customers trust the company to deliver phone service, East said.

"What we provide is 911-quality telephone
service," she said. "People need to know when they pick up the phone that
it's going to work."

October