May 25, 2011 (05:05 AM EDT)
Cox Abandons 3G Network
Read the Original Article at InformationWeek
Cable companies are seeing slower growth and even declines in some areas as users start getting TV shows via the Internet on sites like Hulu. Cellular service seems the next logical market.
Cable providers have been pushing landlines as part of a package bundled with Internet and TV service. Twenty years ago that would have been a great deal, but today it isn't worth the extra $5 per month in taxes and fees since the cell phone is becoming the dominant or even only phone in the house. Cox Communications was pushing hard with its own 3G network to add cellular service to it arsenal, but that decision has been reversed.
It isn't giving up the cellular service, though. Instead, it will continue as a Sprint mobile virtual network operator, according to FierceWireless. That means Sprint owns the network infrastructure and has the license for the spectrum. It sell that to Cox, which then resells it to end users.
Cox launched its service recently in Southern California, and it seems every other bus-stop billboard is pitching it. Instead of losing unused minutes at the end of the month or even being able to roll them over, Cox's service features MoneyBack Minutes. Customers can get back 5 cents for unused minutes up to $20 per month, depending on your plan and how many unused minutes you have.
Rather than go it alone though with its own network, Cox has decided that it makes more sense to leave the network up to Sprint and just resell the service. The cost to put a network in place is substantial, even though Cox already have a decent wired network to carry all of the voice and data before handing it off to a tower for that final leg.
The question is, will consumers want to buy cellular coverage from their cable providers? If you don't travel, it might make sense. Cox's coverage map has a tremendous amount of roaming area and a not-inconsequential amount of no-service areas. Note, that is with Sprint. On its own, the coverage would no doubt be minuscule in comparison. It would only make sense for people who rarely leave their home coverage areas.
This isn't the first time a cable company has ventured into wireless and backtracked. According to the FierceWireless article,Cox, Time Warner and Comcast formed a joint venture with Sprint called Pivot in 2008. Just like Cox's own network, Pivot was short lived.
If a cable company really wants to get into the wireless business, its best bet is to acquire an existing player. Wouldn't it be interesting if a company like Comcast made a competing bid for T-Mobile? If you are a T-Mobile user, who would you prefer your new wireless overlord be--AT&T or Comcast?