Cox Communications, which scrapped the Pivot mobile-phone service developed by a consortium of cable operators this year, plans to debut its own refashioned wireless services in 2009.
The new services, which are to include mobile-TV content at some point, will be delivered initially via Sprint Nextel as well as through wireless networks the MSO is building using its own spectrum.
Cox said it will use the nationwide Sprint wireless network “to quickly enter the market,” while it builds its own 3G CDMA network for additional market launches in 2009.
Cox also said it will test Long Term Evolution technology, a higher-capacity 4G standard being adopted by AT&T, Verizon Wireless and operators outside the U.S.
“We see wireless as an opportunity for growth,” said Cox vice president of wireless Stephen Bye. “We see ourselves becoming a total communications provider.”
Cox will face a largely saturated market: Nearly 80% of U.S. adults have mobile phones and the majority of households with wireless phones have more than one, according to Forrester Research principal analyst Charles Golvin.
“It's going to be a big challenge to dislodge those relationships,” Golvin said. “It's an open question of whether this will be a successful strategy for Cox.”
Bye said Cox will compete as a new entrant by integrating wireless with existing elements of the triple play, such as synchronizing e-mail and contact info with a mobile device, and bundling wireless services with broadband.
“There's a natural package that would allow you to take advantage of high-speed data in the home as well as on the road,” he said.
With the new strategy, Cox breaks ranks with its erstwhile MSO partners in wireless, Comcast, Time Warner Cable and Bright House Networks, which were the other members of the Pivot venture with Sprint. Those three operators have thrown in with Sprint, Clearwire, Google and Intel to fund a WiMax company that will effectively wholesale broadband wireless connectivity, which the cable companies can then resell (see “WiMax Pushed Out of the Nest,” Oct. 6, p. 20).
Bye declined to comment on why Cox did not join the Sprint-Clearwire venture. “We're pursuing our plan because we think it's the right thing for our business,” he said.
Meanwhile, Cox has picked LTE as its broadband wireless-technology path, not WiMax. “We just see tremendous economies of scale in LTE,” Bye said, citing wireless operators in Asia and Europe that are supporting the technology.
Cox has spent more than $500 million on wireless spectrum in Federal Communications Commission auctions. In March it bought 22 licenses in the 700-MHz band — which is being vacated by the digital-TV transition next February — in eight states: California, Virginia, Georgia, Florida, Louisiana, Arkansas, Kansas and Oklahoma. Cox also will use Advanced Wireless Spectrum (AWS) it has access to through SpectrumCo, a venture established with Comcast, TWC and Bright House.
Even after it builds out wireless coverage in its own markets, Cox will continue to rely on Sprint and other partners to provide nationwide coverage, Bye said.
“We're very much a local provider,” he said. “We don't have the spectrum or the desire to build a national network.”
Cox will be building on the lessons from the failed Pivot venture. In March, after little more than two years, Cox, Comcast, Time Warner Cable and Bright House stopped selling the mobile-phone service offered via Sprint.
The issues with the Pivot service included difficulty in integrating service and marketing elements with the rest of Cox's operational systems, Cox president Pat Esser said at an industry conference in June 2007. “We still have product-integration issues we're working through,” he said at the time. “You don't just get into this business in 24 hours.”
In Cox's announcement last week, Esser noted that “to deliver the best customer experience, we will manage every aspect of the service, from product development to marketing and sales to back-office operations and customer support and billing.”
Bye said Cox is putting a high priority on providing a completely integrated service. “Customers will have one place to go to handle all their needs … even post-sales,” he said.
Cox did not announce which markets it would launch first, pricing for the services or how long the company expects the full commercial deployment to take. The MSO had previously introduced Pivot service in San Diego, Phoenix, Oklahoma City, Tulsa, Okla., and its New England market.
Neither is the operator detailing what kind of “converged content” capabilities will be at the core of its wireless offerings. These may include the ability to use mobile phones to access TV shows, program their digital video recorders and access content saved on their home computer. “Clearly there's a lot of value in how we deliver content,” Bye said.
As for the infrastructure side, Bye said there is “more affinity than there might appear on the surface” between wireless and existing hybrid fiber-coaxial networks. Both of those access networks will share certain functions such as voice switching, enabled via a converged IP Multimedia Subsystem platform designed to deliver Internet-based services to mobile devices. (Cox has selected an IMS platform but is not disclosing the vendor.)
“We'll be taking advantage of our fiber assets” to deliver wireless services, Bye said. “The question becomes, Do you have a coax drop or a wireless drop to the customers?”