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Cable Technology Feature Article

April 09, 2009

Cox Communications to Build Out Cellular Network by End of 2009

By Susan J. Campbell, TMCnet Contributing Editor

Cox Communications, the third largest cable provider in the United States, has come to realize it may have been missing the boat and as a result will be launching its own cellular network. As more and more consumers go wireless, it stands to reason that Cox (News - Alert) will want to cash in on this still growing market.

As Laura June reported yesterday on engadget.com, the cable giant actually reported its intentions last October, but appears to be reaffirming its commitment to complete this network by the end of 2009. It is expected Cox will use a portion of its winnings from the 700MHz auction to support this move.

While the company is not divulging many details, its wireless division VP, Stephen Bye (News - Alert), said the network will allow them to offer a bundled television, broadband and wireless service. The company also hopes to focus on the burgeoning mobile video market and may even launch an app store in an effort to compete with other power players in the market.

The Wall Street Journal online was not so positive in its story about the cable provider’s latest plans. Amol Sharma and Vishesh Kumar indicated that Cox will have a challenge ahead of them to try and achieve differentiation in the already crowded market. Competitors like Comast and Time Warner Cable are backing a start-up instead of taking on the challenge themselves.  

"Wireless is a conundrum for the cable industry in how we take that first step," Comcast (News - Alert) Chief Executive Brian Roberts said at an industry event last week.

This isn’t the first time Cox has tried to venture into the wireless arena as it did partner with Comcast, Time Warner and other cable providers through an arrangement with wireless carrier Sprint Nextel (News - Alert) Corp. This joint venture, Pivot, dissolved last year over disputes between the partners regarding pricing and marketing strategy.

According to Bye, providing cell phone service will allow Cox to offer a bundle of TV, broadband and wireless service. Bye hopes the company can use its TV experience to exploit the nascent mobile video market as this segment of the market is poised to grow as smart phones become more advanced.

Mark Donovan (News - Alert), a mobile analyst at comScore weighed in on this initiative, believing Cox’s plans may be wishful thinking. He questions whether mobile video will ever gain significant traction in the U.S. market and warns that video alone is not any kind of key differentiator.

Others also question the company’s ability to build out this network and effectively drive enough revenue to sustain it in a down economy. Cox may have thought all this through and have a few tricks up its sleeve, but we’ll have to wait and see if these tricks are enough to overcome the obstacles.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Stefania Viscusi