• Cable player competition in the mobile service arena has increased in the US with Cox Communications announcing its Cox Mobile offering during CES 2023.
• Cox Mobile is launching nationwide to its 7 million broadband subscribers in 19 states with a by-the-Gig $15 plan and an unlimited $45 plan per line.
• Cox Mobile will use Verizon’s network as an MVNO while also offloading to its 4 million hotspots.
• Cable net-adds will continue to grow strongly as customers look to bundle and save money.

America’s third-largest cable internet provider Cox Communications announced its Cox Mobile service during CES 2023. The service will run on Verizon’s network and be available for its 7 million broadband customers nationwide. Cox covers around 7% of US households, parts of 19 states and Washington DC. Cox is following the footsteps of other cable players, like Comcast’s Xfinity Wireless, Charter’s Spectrum Mobile and Altice’s Optimum. June 2022 saw the launch of WOW! Mobile, which runs on Reach Wireless.

Cable’s growing mobile presence

Cable companies have steadily increased their mobile subscriber penetration over the years. When looking at combined net adds, they have captured the highest amount of postpaid net-adds in Q3 2022, with 734,000 altogether between Xfinity, Spectrum and Optimum. Postpaid carriers like Verizon, AT&T and T-Mobile, while initially not concerned, are now starting to pay closer attention to cable players as they continue to have strong subscriber growth. This trend is being boosted by the US’ current socio-economic conditions, as customers are trying to save money wherever they can. Cable players utilize a bundling approach for their mobile services by combining the deals with their internet services. This provides cost savings and fewer service providers to manage every month.

Source: Verizon, T-Mobile, AT&T, Comcast, Charter, Altice earnings statements, Counterpoint Research internal data

Cox Mobile launches two service plans and Samsung device lineup

Cox Mobile is offering two plans, just like other cable providers. The first plan is a by-the-Gig plan for $15 per month, while the other is an unlimited offering for $45 per month. During a press event, Cox Mobile Assistant Vice President of Marketing Catherine Borda de Castro and Vice President Tony Krueck emphasized the unrestricted ability to switch between the two plans to offer the most flexibility and savings possible. For a single line, when you compare Verizon’s lowest 5G unlimited plan, “Welcome Unlimited”, at $65 per month (that is with auto pay and paper-free billing), with Cox Mobile’s $45 per month unlimited plan, yearly savings amount to $240, making a very compelling case for consumers looking to reduce monthly service costs.

Source: Cox Mobile website

The current mobile phone offerings are limited, but Cox says it will launch more flagship devices in the coming months. Currently, Samsung is the only brand being offered, with devices like the A13 5G available for $199.99 ($50 off) and the S22 for $499.99 ($300 off) until January 31. The likely reason for this is Cox’s need to have devices switch seamlessly between Wi-Fi and the cellular networks it supports, which may require some changes to existing device infrastructure and software. Another potential reason is that smaller OEMs might be hesitant to join at the start as the unit economics and ROI still need to be proven out for a company that wants to break into the mobile space. Cox already tried to enter the market in 2011 but shuttered the efforts as it found it was not able to be competitive within the market back then.

Leveraging networks, between CBRS and Wi-Fi calling

While Cox does hold some spectrum in the CBRS space, it has not deployed or utilized the assets yet. Like Comcast, Cox could potentially begin installing small cells in key metropolitan areas to offload traffic from Verizon’s network, which would save the new MVNO millions over the long run, as it wouldn’t need to pay to use Verizon’s network for connectivity. Along the same lines, Cox will use its over 4 million hotspots to offload traffic from Verizon’s network. Cox does not own all these hotspots, instead it collaborates with other cable and internet service providers including Optimum, Spectrum and Xfinity to achieve nationwide coverage.

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Before the national launch, Cox Mobile was tested in Hampton Roads, Virginia, Omaha, Nebraska and Las Vegas Nevada, with some CBRS field testing done in Las Vegas as well. The results looked very positive according to Cox and provided confidence to open the service to its 7 million customers in 19 states. The current mobile offering is only available for consumers, although Cox Mobile does acknowledge that business subscriptions is another lever it is looking into.

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Cox Mobile to go big on marketing – Annie the sheep and Super Bowl

Cox promised to heavily begin marketing its offerings during major sporting events, such as upcoming NFL games and the Super Bowl. It showcased its marketing campaign, which will revolve around Annie the sheep, not only a representation of Cox Mobile’s brand and vision but also an embodiment of its customer base and values.

[embed width="300"]https://twitter.com/MKlaehne/status/1611043806685855746?s=20[/embed]

What Cox Mobile means for mobile industry

Cable players will likely continue growing their mobile subscriber base, especially in these recessionary conditions as people look for value and cost savings. This will put additional pressure on postpaid carriers, which have been bleeding subscribers to cable players over the last years. There is hesitancy in the industry, especially OEMs, to go all-in on partnerships with Cox Mobile, as it is a new brand with no mobile customer base. The US smartphone market is already facing weakness due to the economy, inventory glut, and COVID-19 closures of factories in China. This makes additional investments into new markets challenging for many OEMs.

Source: Comcast, Charter, Altice earnings statements, Counterpoint Research internal data

The initial quarters after the launch will be the key for Cox Mobile to begin getting mobile subscribers and prove to the market that further investments and collaborations will be fruitful in the long run. Strong Q4 earnings announcements and net-adds from Comcast, Charter and Altice will help Cox Mobile. It will likely benefit from a halo effect, as Xfinity and Spectrum are showing good mobile penetration already, at 15% of their subscriber base. Operating margins will also be a key factor to watch since it will reveal how well Cox can utilize its wireless hotspots to offload cellular traffic. Look for Cox Mobile to follow similar playbooks of other cable players in 2023, but with some distinct differentiation such as seamless rate plan switching and a cleverly thought-out marketing campaign.