Cable operators offer wireless contracts

updated 8:56 a.m. ET March 12, 2007

Two months ago, Fred Poteet walked into a Sprint store to resolve some technical problems with his cell phone service. When he walked out, he had a new wireless contract — with Cox Communications Inc., his cable TV operator.

"Since I already had Cox digital TV, the high-speed Internet and Internet telephone, they said they could bundle it all in one package," said the 62-year-old engineer from Goodyear, Ariz. "They were also giving away a free phone if I added another line. Free sounded pretty good."

Branded cell phone service is the latest attempt by cable operators to compete with — and swipe customers from — traditional phone companies that themselves are invading cable's turf by offering TV service. Each side wants all of the consumer's communications business and each has plans to make the technologies complement each other.

Cox is one of four top cable companies hoping to attract more customers like Poteet as they roll out mobile phone service this year with Sprint Nextel Corp. in New York. The cell service is powered entirely by Sprint, but the cable operators do their own marketing and take over the customer service.

Philadelphia-based Comcast Corp., the nation's largest cable TV operator, is expanding its cell phone service this year beyond its two test markets in Boston and Portland, Ore. while No. 2 Time Warner Cable will be launching mobile in all regional divisions by the end of the year. The Stamford, Conn., cable operator has been doing tests in Austin, Texas, and Raleigh, N.C.

In February, Atlanta-based Cox launched a mobile plan in the Phoenix area and San Diego as part of a bundle of services. It will be rolling out the service in more cities this year. The fourth partner, Advance/Newhouse Communications, would only say its cable arm is testing in a few cities.

But it may be an uphill battle to get consumers to think of cable companies as cell phone providers, in part because it still doesn't have the depth of offerings available from other wireless carriers. Cable also has to overcome a reputation for higher annual price hikes than the phone companies.

Sam Gonzales, a 28-year-old marketing manager from Gaithersburg, Md., isn't attracted to cable cell phones because of the slim pickings.

"The only partnership they have is with Sprint," he said. "It was only four handsets they were going to offer. It limits you to a lot of things."

One sign the integration isn't easy: Customers still can't order the cell phone service through the cable operators' Web sites because of incompatibilities among all their systems.

To lure consumers, cable is not only touting the convenience of paying your communications costs on one bill and cable e-mail access, but also free calls to the cable landline phone, streaming TV shows to the handset and later, remote DVR programming and other perks.

For Poteet, an in-store demonstration by Cox caught his eye. What cemented the deal was that by paying a bit more, he got 100 additional minutes, five cell numbers instead of four, plus cable features like access to his Cox e-mail.

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