In this photo illustration the Cox Communications logo seen displayed on a smartphone screen.
Raphael Henrique | SOPA Images | Light flare | Getty Images
Cox Communications is ringing in the new year with the official launch of its mobile business.
The private cable and Internet operator plans to announce the nationwide launch of Cox Mobile Thursday at the Consumer Electronics Show in Las Vegas.
Cox has followed peers like Comcast, Charter Communications and United Stateswho started offering mobile service to their customers in recent years and added customers in the blink of an eye.
Like services from Comcast and Charter, Cox Mobile will only be available to new and existing customers. Cox has 7 million customers in 18 states and began quietly offering mobile service in select markets in recent months.
Cable operators have started offering mobile services in an effort to give customers another reason not to drop their broadband plans. This is truer than ever, as the profitability of these business units is in sight.
Cable companies have lost pay-TV customers opting for streaming-only services, although that has accelerated recently. However, growth in broadband subscribers has stalled in recent quarters as competition has intensified and customer moving activity has stagnated as the housing market slows.
“I think they’re now repurposing wireless to build their broadband business. There’s not a lot of profitability yet, but that’s not their concern. The concern is retaining broadband customers,” said UBS analyst John Hodulik. .
How competition takes shape
Although wireless companies like AT&T, Verizon and T-Mobile hold the vast majority of wireless customers in the United States, the mobile businesses of Comcast and Charter have grown faster thanks to cheaper and more flexible plans.
Charter’s Spectrum Mobile offers a $30 unlimited data plan, or $14 per gigabyte of internet used in the monthly plan. Similarly, Comcast’s Xfinity Mobile starts at $30 for unlimited data, or $15 per gigabyte.
The cheaper options stem from their ability to rely heavily on high-speed home Wi-Fi and hotspots for data usage. When their mobile customers leave Wi-Fi and are dependent on a network, they are offloaded to the cable companies’ carrier partner – Verizon for Comcast and Charter – still giving the wireless company a piece of the pie.
Cox Mobile will offer similar plans, unlimited at $45 per month or $15 per gig. Cox would also use Verizon as a network partner, which the company is expected to confirm at Thursday’s event.
A wrench was thrown into Cox’s plans to launch its mobile business when T-Mobile sued the company in 2021, claiming Cox was obligated to continue a partnership with them. Earlier this year, a Delaware court judge reportedly ruled in favor of Cox.
Charter said it had 4.7 million wireless customers as of Sept. 30, while Comcast said it had reached 5 million.
“We started with this reinvented mobile service because we knew customers would spend a lot of time on Wi-Fi,” said Danny Bowman, director of mobile at Charter, adding that Spectrum Mobile customers spend around 85 % of their time on Wi-Fi. Fi.
“By keeping the mobile plan simple, we have exponential growth,” Bowman added. Charter and Comcast also allow customers to bring their own devices, an option Cox will not yet offer. Currently, customers must purchase Samsung phones through Cox for service.
“We need to”
Smaller cable companies also see value in offering a mobile plan to customers.
The National Content and Technology Cooperative, or NCTC, an industry group made up of more than 700 cable and broadband providers, has begun discussions to create a mobile offering for its members.
“It’s become such a focal point. It’s what everyone thinks is what you need,” NCTC chairman Lou Borrelli said of the mobile offerings. “I saw it called the new bundle. I don’t dispute that.”
Because NCTC members include small providers – many in rural areas – the cooperative began talks with wireless carriers last year on behalf of its entire base.
Borrelli said the NCTC was in no rush to offer mobile until it saw how Charter and Comcast made sharp additions in 2021,'” he said.
NCTC negotiations are expected to conclude this year, Borrelli said. Some have already added mobile. Based in Colorado WOW! Internet, cable and telephone unveiled a mobile plan in July through a partnership with Reach Mobile.
Borrelli said consumer research in some markets showed companies had no choice in the matter. “The members told us they don’t care about the results, we have to do it.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.