Cable operator Cox Communications is getting closer to launching its new cell phone service. And The Wall Street Journal has picked up a few more tidbits of detail about what the company has in store for the new service.
Cox has been dreaming of wireless for a long time. It had been involved in a joint venture with Comcast, Time Warner, and other cable companies to build a new wireless company. The plan was to use Sprint Nextel's network to provide the service. But in fewer than three years, the companies squabbled over marketing and technical issues, and they dissolved the joint venture.
Now Cox is building a wireless network on its own, using the nearly $550 million worth of spectrum it bought in the Federal Communication Commission's Advanced Wireless Services and 700 MHz wireless auctions.
An executive at Cox who talked to the Journal said the company plans to bundle its wireless service with its existing TV and broadband services. And the company hopes to get more of its customers hooked on mobile TV. It's also considering opening a mobile application store like the one that Apple offers for the iPhone.
Cox isn't just looking to offer cell phone service. The company also wants to offer its broadband users 3G wireless data services when they are on the go. Cox, the third largest cable operator in the U.S., provides service to some 6.2 million residential and commercial customers, but it only offers service mostly in the South and Southwest. The company said it will use roaming deals to provide national wireless coverage for its customers.
The company hasn't yet discussed pricing for its service or even talked about revenue goals. But one thing is clear, it will likely be a tough market for Cox to crack. With more than 84 percent of Americans already subscribing to a cell phone service, Cox will likely have to compete on price to get customers to switch to its service. The company will also have to focus on getting cool new handsets to offer its subscribers too. None of this will be easy in a market that already has at least four national wireless carriers and a slew of smaller regional players.
And make no mistake about it, building a wireless network isn't cheap. Even though Cox has already paid the money for the spectrum, an analyst at Jeffries & Co. told the Journal that the company would have to invest at least $300 million before it could break even on the venture.