Consumers want choice, value, and entertainment from service providers, according to Patrick Esser, Executive VP of Operations at Cox Communications, who spoke at SUPERCOMM in Atlanta. By offering bundled services over a converged network architecture, Cox believes that it offers the right combination to win customers' business. The cable industry has invested $75 billion since 1996 to upgrade its infrastructure for advanced services. The Cox network alone includes 1.5 million miles of fiber. The company's integrated IT infrastructure allows customers to make one call to a single group for customer service, and allows Cox to deliver one bill for all services. Esser believes that this gives Cox a significant advantage in its ability to compete and add value. He noted that 70% of Cox customers choose cable over DSL for high speed Internet service, and the company expects 1 million phone customers by end of this year.
Unlike some others in the industry, Cox does not believe that telecommunications faces a one dimensional, commodity-driven future. It's not just price, said Esser, it's about bundling, value proposition, and convenience. Cox is working to offer new solutions and services to its customers, including home networks, remotely accessible home security systems, and a home healthcare monitoring and advisory system. Esser said that Cox wants to work in partnership with systems vendors, and is looking to the industry for a variety of solutions, including ways to ease the transition from a circuit switched to VoIP telephone network.
Separately today, Cox Communications provided statistics regarding the influence that telephone and bundling offerings have on its customer relationships. Highlights include:
- 77% of Cox Digital Telephone customers chose Cox's long distance service offerings over competitors.
47% percent of its Digital Telephone customers purchase a full bundle of voice, video and data services from Cox.
Over 40% percent of Cox's homes passed can order the company's telephone service today.
Phone and high speed Internet service reduces customer churn rates. Customer churn among two-product video subscribers is 25% lower than among video-only subscribers. Among three-product customers, churn is 53% lower.
Cox said that it continues to explore cost-effective ways to expand its phone service footprint and leverage its existing nationwide IP backbone network, including VoIP technology.
The cable industry's network infrastructure has turned out to be much more capable than anyone expected, according to Dr. Richard R. Green, President & CEO of CableLabs. In seven years, the cable industry has gone from offering no Internet services to current subscriber levels of 12 million in the US and 18 million globally. Green said that this success was due to the establishment of standards and close cooperation with networking companies. CableLabs considers DOCSIS the most notable and successful of its standards efforts, which has resulted in modems provided by scores of manufacturers, a decline in modem prices from $400 to $40, and a simple and reliable setup process for customers, making self-installation a reality for most new subscribers. DOCSIS continues to evolve, with v1.1 and 2.0 allowing the delivery of voice service and security. DOCSIS 2.0 also offers symmetric upstream and downstream connections, and the first modem certifications have already taken place.
CableLabs will continue to work with system and component vendors to development new standards, including:
- PacketCable, for primary line voice service via VoIP, and multimedia services like conferencing and gaming. Time Warner has already deployed PacketCable services in Maine.
OpenCable, a standard interface for digital TV and set-top boxes, including the ability to integrate full set-top functionality directly into TVs. The first OpenCable TVs will appear by year end.
CableHome, to simplify home networking.
http://www.cablelabs.com
- Cox Communications ended Q1 2003 with 782,546 Digital Telephone subscribers, an increase of 52% in one year.
In May 2003, Juniper Networks announced that Cox Communications had deployed its T-series routing platforms in its national IP backbone. Juniper's T320 platforms serve as peering points in Cox's new IP backbone. The peering is used to manage bandwidth growth at regional data centers by re-directing IP traffic.
During Q1 2003, Cox added 154,433 high-speed Internet customers, ending the quarter with 1.6 million high-speed Internet customers, representing year-over-year growth of 56%. Penetration in California is now 24%, despite heavy marketing of SBC's DSL service in the region. The company believes it is capturing 7 out of every 10 high speed Internet customers in the markets it serves. Cable modem service is available in 96% of the Cox footprint. The company also added 64,126 Cox Digital Telephone customers, ending the quarter with 782,546 telephone customers, representing year-over-year growth of 52%. Cox said it will continue to push its circuit-switched technology in the markets it serves, while continuing to evaluate VoIP for its expansion markets.
