Cox Communications plans to sell wireless spectrum licenses covering 28 million U.S. residents to Verizon Wireless for US$315 million, becoming the latest cable operator to join with Verizon for mobile services.
Earlier this month, a joint venture of three of the largest U.S. cable companies agreed to sell their Advanced Wireless Services (AWS) spectrum to Verizon for $3.6 billion. The venture had acquired the licenses, which cover about 265 million people, in 2006 but had never used them. The group, called SpectrumCo, included Comcast, Time Warner Cable and Bright House Networks.
If the spectrum purchases receive antitrust and Federal Communications Commission approval, they will give Verizon Wireless a rich source of spectrum to strengthen its mobile network and more channels through which to sell its services. The deals also represent a retreat from mobile by U.S. cable operators, which have not had much luck selling wireless along with their packages of home video, data and voice services.
Verizon's deal with Cox is similar to the one it reached with the other SpectrumCo members, and Cox plans to enter talks to join the venture Verizon created with those companies. Cox and Verizon will be able to sell each others' products and services at retail, and Cox eventually may be able to sell Verizon Wireless services through a wholesale arrangement.
Cox has been offering a mobile service over Sprint Nextel's network, after abandoning plans to build a network of its own. But earlier this month, the company announced it would phase out that service by the end of March 2012. Cox said it was not able to offer the speed, devices or network reach to compete in mobile. The AWS licenses Cox is selling to Verizon cover 20MHz of spectrum, roughly enough to offer an LTE (Long-Term Evolution) service. However, Cox is not selling its spectrum holdings in the 700MHz band.