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Cox Communications, the third-largest cable provider in the US, announced today that it’s launching a mobile phone service that it will bundle with its cable and internet service, Bloomberg reports.
The cellular service is launching today in Orange County, California; Omaha, Nebraska; and Hampton Roads, Virginia. The company is hoping to take on phone companies like AT&T and Verizon who have been steadily encroaching on Cox’s TV market share.
Cox says the service will be “unbelievably fair” to consumers by giving money back for unused minutes, and the company will also bundle free TV, Internet, or landline phone service. The company will offer alerts to consumers as they approach their monthly minute limit, and will give 5 cents back for every unused minute (up to $20 a month).
24 percent of its customers said they would switch to its mobile service in May, the company said.
Cox will use Sprint’s 3G network initially, but the company is also working on a network of its own, according to the company’s vice president of wireless, Stephen Bye. The company will offer wireless service only in areas where it operates — it has no plans to become a national carrier. Its monthly contracts will start at $39.99, and the company will offer free calling to other Cox cellphones and landlines.
Cox will offer an array of Android handsets initially, including the HTC Desire, Motorola Milestone and LG Axis. The company will expand its offering based on customer demand, according to Bye. The company will sell the phones at its Cox Solutions Stores.
The news makes Cox the first cable company to pursue a wireless service offering, as well as the first to offer a “quadruple play” of services (wireless, TV, internet, and landline phone). Cox and other cable companies have a long history of joint ventures to enter the wireless business — often with Sprint as their partner — but none seem to have taken off as planned.
I can certainly imagine Cox customers being tempted by wireless plans bundled with other Cox services. But building its own network seems foolish when the company can easily lease service from major carriers. The company may eventually save some money by building its own network, but there’s no guarantee it will be able to recoup its costs.
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