Cox Communications Inc. is having another go at offering wireless cell phone service to cable and Internet customers here.
The company, which is headquartered in Atlanta and has its West Coast hub in Rancho Santa Margarita, is looking to sell wireless service plans and phones bundled with other services, including home phone, Internet and cable.
Cox inked a deal to use Sprint Nextel Corp.’s network for wireless service.
“We are essentially a reseller of the Sprint network,” said Duffy Leone, senior vice president and general manager of Cox’s operations in Orange County, Palos Verdes and Santa Barbara. “We looked at the various national players and we felt that Sprint was the best fit for Cox from a cultural and competitive perspective.”
It’s a model Cox tried in 1997 when it joined Sprint and other regional telecommunications companies in Sprint PCS—which stood for personal communications service. The venture operated from Irvine for a time and ultimately failed to bear fruit.
“We have gone down this path a couple of times with Sprint,” Leone said. “Because we have such a long relationship with them, we know the things that haven’t worked and the things that have.”
Past efforts to roll out Cox wireless service were “a little before their time,” Leone said.
The biggest reason: Cox took the back seat on customer service and let Sprint take the lead, according to Leone.
“The first time around, the bills didn’t come from Cox,” he said. “We learned that we needed to control the experience with our customers. This time around we wanted to make sure that Cox is able to deal with our wireless customers in the same way they are used to dealing with other parts of the business.”
That means Cox will deal directly with customers.
“We are using the Sprint network as the delivery mechanism, but all of the customer contact will be through Cox,” Leone said.
Getting customers through Cox is a good move for Sprint, which has seen its wireless subscriptions flag in the past few years.
It doesn’t seem that Cox, with some 240,000 home customers here, is looking to compete with the likes of Verizon Wireless, part of New York’s Verizon Communications Inc., or AT&T Inc.
Cox sees offering wireless service as a move to nab customers who don’t have traditional phone lines in their home and rely on cell phones instead.
“There are a certain percentage of people who are disconnecting their home phones, and we want to make sure they have a Cox alternative,” Leone said. “It’s also an offensive strategy in that it’s a new revenue stream for us.”
It’s also a way to retain existing customers with discounted bundled services that allow consumers to pay via one bill, according to Leone.
“We believe that customers who have more our products and services will be more likely to remain Cox customers,” he said. “We want to be able to offer a comprehensive telecommunications experience.”
Marketing
Cox has been gearing up for the launch locally with direct mail marketing and cable TV spots.
It also revamped its stores—a key part of its strategy to sell phones.
The company has six stores in OC.
“We expect about 85% of our sales will come from the retail stores,” Leone said. “We have spent a great deal changing the face of our retail stores to be much more of a full-service experience, as opposed to a place you go to pay your bill.”
The cell phone service is offered as a monthly subscription. Customers can get alerts if they are about to go over their allotted minutes and get cash back for unused ones.
“We don’t want people to be frustrated by their plans,” Leone said. “We are trying to make it as customer friendly as possible.”
Cox has negotiated directly with cell phone makers to secure a lineup of products to be sold in its stores.
So far, it’s offering a handful of phones made by Motorola Inc., Samsung Group, HTC Corp., LG Corp., Kyocera Corp. and others.
The phones range from free after rebates to upward of $200.
Wireless service started late last week in three areas where Cox has hubs, including South OC, Palos Verdes, Omaha, Neb., and Virginia Beach, Va.
More areas are set to follow early next year, Leone said.
“As we get off the ground and start gaining customers, we will launch in the rest of the country,” he said.
Cox is aiming to sell some 100,000 wireless phones locally by the end of the year, he said.
