with Kelly Williams, Cox's vice president of wireless products
Cox Communications is a renegade among its cable brethren: The MSO had planned to forge its own path in wireless by offering its own branded cell phone service via an MVNO relationship with Sprint Nextel, while building its own 3G network with wireless spectrum. However, the cable company decided to change course for 3G and instead will now go to market exclusively via an MVNO relationship with Sprint.
FierceWireless' Executive Editor Mike Dano recently sat down with Kelly Williams, Cox's vice president of wireless products and operations, to discuss Cox's change of plans, the carrier's progress in wireless to date and what its plans are for the future. (Williams also discussed Cox's prepaid plans.) The following is a lightly edited transcript of that conversation.
FierceWireless: Can you explain Cox's decision to discontinue building its own wireless network in favor of offering service via an MVNO deal with Sprint Nextel?
Williams: First, this is a decision relative to 3G, not to 4G. And there were really three fundamental drivers for it. First of all, the economics of the 3G wholesale model changed in a favorable way. Also, time to market: As we worked on building out those 3G build markets, it took time. It takes time to build a market from scratch. And so going with a wholesale strategy allows us to get to market much more quickly. It would take us years if we were to build out our own 3G network.
And then, in the wireless industry overall, 4G has come on much more rapidly than anyone expected. And so even if we were to continue building, we would not build any more 3G markets. We would build 4G markets. And it just wouldn't have made sense to have a bunch of 3G markets sitting out there from an operational and a cost perspective.
(Cox also noted that its switch to the Sprint MVNO service did not affect any customers.)
FierceWireless: So does that mean Cox plans to use its AWS and 700 MHz spectrum for 4G? Can you talk about Cox's view of 4G?
Williams: We think providing 4G is an absolute requirement relative to providing service to our customers in the future. And we believe they will be demanding that at some point in the future.
Having spectrum gives us options that carriers who do not have spectrum do not have at their disposal, so we're taking a look at a whole variety of potential approaches to providing 4G service. That being said, we're still really in the middle of a lot of discussions with a lot of different entities, and doing strategic work internally, so it's difficult for me to really comment beyond that.
But [our] spectrum could play a role in how we bring 4G to market.
FierceWireless: Can you say who you're speaking with for 4G? Does it include Clearwire or LightSquared?
Williams: Unfortunately, that probably wouldn't be appropriate.
FierceWireless: Let's talk about Cox's current wireless offerings. Where are you in terms of the overall rollout?
Williams: So we've announced our next markets, and we're soon rolling out in Northern Virginia and in Roanoke, and that completes our rollout in Virginia overall. Then from there we're going to deploy in certain Cox markets in Kansas and Arkansas. And then subsequent to that we are deploying in San Diego and Santa Barbara.
So by the end of this year we will have 50 percent of the cable footprint covered [with wireless].
Williams: We intend to do that, but we're not communicating timelines yet. We're still working on specifics.
FierceWireless: Can you provide any metrics or subscriber numbers on how Cox's wireless business is going to date?
Williams: Cox doesn't provide subscriber numbers overall, so we're really not doing that in the wireless business, but I can tell you that things are going extremely well.
Based on our original [gross subscriber additions] forecast, which I thought was a reasonable forecast, we're actually at about double what that forecast was.
Our customer satisfaction scores are very high and actually directly in line with our other products already. Our customers are very pleased with our device lineup, which is a very good-news thing because obviously for carriers in our position, device availability can be a challenge. But we've not had any issues with that.
And they're also pleased with the service and how we've bundled it into the rest of our offerings. So we have this thing called Bundled Benefits, and it's basically, if you're a Cox wireless subscriber, you're entitled to either a free speed upgrade to your Internet service, or a free premium movie package like Starz or Showtime, or free long distance on your Cox digital telephone service. That's actually the No. 2 driver behind what we're told by our market research people as to why people choose Cox; the No. 1 driver is MoneyBack Minutes, where we will refund up to $20 per month, depending on the number of [wireless] minutes not used.
FierceWireless: On handsets, what is the split between feature phones and smartphones for new subscribers?
Williams: It's about 40 percent smartphones.
FierceWireless: What new handsets can we expect from Cox?
Williams: You can expect new devices being announced over the course of the next three to six months. We will have new devices coming to the portfolio actually in the next few weeks. They are Android devices.
FierceWireless: What about tablets?
Williams: We're looking at tablets. There are some challenges associated with getting into the business of selling tablets. In fact, if you look at the market, the preponderance of tablets aren't being sold by the wireless carriers, they're being sold in third-party retail. So it certainly is a major theme right now from a mobility perspective, it's just not clear if it's the right thing for us to do. We're looking at it.
FierceWireless: Anything else you wanted to talk about?
Williams: I think the only other thing that I would point out is what we're doing relative to retail. That's really been a good-news story for us. We've had numerous accolades on our Solutions Stores; they represent a very large portion of our [wireless] gross adds. And customers just really, really seem to like coming to the Solutions Stores. And it's not just a wireless experience: We sell all of our products through these Solutions Stores as well.