Cox Communications, the third-largest U.S. cable operator with six million subscribers, has made the decision to enter the highly competitive wireless market, and in particular is looking at targeting two very nascent sectors — mobile video and app stores. The Atlanta-based company, which bought spectrum in a government auction last year announced in October that it was going to build its own wireless network, but will start offering services over Sprint’s network until it is complete. The plan will cost the cable operator millions and differs from its competitors, like Comcast (NSDQ: CMCSA), Time Warner (NYSE: TWX) and Brighthouse, which is partnering with Clearwire (NSDQ: CLWR) rather than build its own network.
Stephen Bye, Cox’s VP of wireless, told the WSJ that by building its own cellphone network, it will be able to leverage its experience in TV “to exploit the nascent mobile video market,” which Bye expects to grow as smartphones get more advanced. Bye also said Cox is considering offering an app store, similar to the one on the iPhone. Cox: “We don’t want to be at a comparative disadvantage with what’s already out there.” Cox is working with a vendor, mPortal, to develop the store, according to unnamed sources.
Although these sound like preliminary plans, it’s surprising that Cox would target such unproven areas in mobile. For years, incumbent providers have failed to get a lot of traction in mobile video despite putting a lot of effort into it. There’s also concerns that if too many customers stream video all at once, it would clog the network. Likewise, while app stores are one of the trendiest things in wireless right now, it’s to early to know how succesful they will be over the long-term, especially as tons of variants flood the market. Of course, Cox is expecting to leverage its current customer base, of which 64 percent already buy multiple services.
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