US WEST
cableworld.com
In Phoenix, Everyone Wants A Piece of the Action
By Alan Breznick
Much like Atlanta, Detroit, Chicago and Cleveland, Phoenix is emerging as a hotbed of competition between the dominant cable operator and the incumbent Baby Bell.
Under the blistering Arizona sun, Cox Communications Inc. and U S West Inc. are scrapping for cable, phone and high-speed data customers as both companies deploy new digital services in one of the nation's fastest growing metropolitan areas. Each sees Phoenix, with its rapidly expanding upscale population, as a key market for selling such new products and services as digital cable, cable modems, digital subscriber lines (DSL), phone-over-cable and Internet TV.
"It has pretty good demographics," said a U S West spokesman. "There are lots of professional families (moving in)."
U S West and Cox are not alone. A wireless cable operator, SpeedChoice, is positioning itself as a third major competitor in the Phoenix area. A unit of People's Choice TV, which was recently bought by Sprint Corp., SpeedChoice is already offering video service and plans to serve up data as well in a flat, sunny, relatively tree-less region particularly well-suited for MMDS signal transmission.
"We consider them a legitimate threat," said a Cox spokesman in Phoenix, where the MSO has 610,000 cable subscribers and passes 1.1 million homes. Rumors are also flying that another regional Bell, SBC Communications Inc., plans to enter the Phoenix market too.
In a competitive move one month ago, U S West began a marketing trial for its new Internet TV service, WebVision, which permits customers to send e-mail, make phone calls and surf the Internet using a special TV set-top box. The regional Bell, which Global Crossing Ltd. and Qwest Communications International Inc. are battling to buy, is also testing WebVision in Denver and Minneapolis and plans to launch commercial service later this year.
U S West already offers its separate VDSL (variable digital subscriber lines) service in parts of the Phoenix area. The company says this U S West Choice TV & OnLine service, combining 142 channels of digital cable and high-speed data, now has "several thousand subscribers" and passes about 100,000 households.
"It is a neighborhood-by-neighborhood rollout," the U S West spokesman said. "We'll continue to ramp up in the third and fourth quarter."
Both U S West and Cox are also putting together bundled packages of video, voice and data services to offer one-stop shopping to consumers tired of paying separate providers. They hope to lure customers with the promise of convenience, price discounts and fewer separate bills.
Cox, for instance, is already offering cable and Internet access on one bill and phone service on a second. The MSO, which introduced phone service and @Home in Phoenix two years ago and added digital cable in January, plans to combine all three charges on a single bill eventually and allow customers to start paying bills online in September.
"We're aggressively marketing all the products now," said Paul Gregg, VP-sales and marketing for Cox in Phoenix, where the MSO is swiftly expanding the number of homes that can receive all three services. "We're moving more from a rifle shot to a shot-gun (approach)."
Cox, which now offers up to 207 channels of digital cable and high-speed data to about 560,000 homes in Phoenix, started hawking @Home on the radio recently and intends to expand the campaign to broadcast TV by the fall. Using mostly direct mail, it's now pitching digital phone service to at least 60,000 households, with plans to boost this total to 200,000 by the end of the year.
Cox and U S West declined to disclose how many digital cable, high-speed and local phone customers they have in Phoenix.
In addition, the two rivals are scrambling to sign up housing developers to exclusive or near-exclusive deals to provide video, voice and data services to new golf, retirement and other complexes rising throughout the area.
(July 19, 1999) |
