Cox Brings Wireless in for a Bundle Upsell

| Nov 22, 2010 | Consumer Services - U.S.
| Analyst: William Ho

Event Summary

November 19, 2010 - Cox Communications unveiled wireless services that complement its cable television, Internet and wireline services. The self-titled “Unbelievably Fair” wireless plans include Moneyback Minutes allow for a bill credit up to $20 per month for unused minutes. Offered initially in three markets, wireless subscribers have one bundle upgrade choice from unlimited domestic long distance, increasing cable broadband speed or one premium cable channel.

Quick Take

Analytical Summary

• Current Perspective: Moderate on Cox Communications’ new “Unbelievably Fair” plans, because the company’s wireless play is mainly a move to enhance a wireline-wireless story. Though the idea of refunding money for unused minutes is a novel and innovative development and giving existing wireline customers an upgrade incentive choice of a premium channel, unlimited domestic long distance or a boost in broadband speed, the addressable target segment is niche, consisting of its existing bundle customers and those at wireline competitors. Success also hinges on Cox’s less numerous Cox Solution Stores since these distribution outlets’ staff will need to show compelling value reason to switch for potential customers.

• Vendor Importance: Very high to Cox, because it needed to deliver on its wireless service promise made over two years ago. The use of Sprint’s network to kickstart service was a necessary element in offering a national footprint, but Cox has yet to take advantage of the AWS frequencies acquired in 2006 nor any imminent LTE service launch to help it stand out against wireless competitors launching newer wireless technologies (i.e., LTE, HSPA+ and WiMAX).

• Market Impact: Very low on the wireless services segment, because the new plans do not affect the wireless-only audience as wireless service is only available for customers who also subscribe to Cox cable, Internet and/or wireline phone service at time of activation. Yet competitors such as AT&T and Verizon with both wireline and wireless properties may see pressure as Cox goes beyond table stakes features such as remote and mobile DVR programming and introduce unique converged benefits such as a universal contact manager and voice mail to text message conversion.

CLIENTS ONLY

Competitive Positives and Concerns

Response & Recommendations

Analytical Perspective

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