| HBS Case Collection
(Revised September 2005)
Cox Communications, Inc.
Cox Communications, the third largest U.S. cable television system operator, is confronting strategy decisions in mid-2004. Cox managers must decide whether to speed its deployment of Voice over Internet Protocol (VoIP), which offers capital and operating costs savings compared to the traditional circuit-switched technologies Cox has used to offer phone service. Cox has had great success in attacking incumbent phone companies with bundles that include TV, high-speed Internet, and telephone services. However, VoIP deployment will be capital intensive, and Wall Street is pressuring Cox, like other cable operators, to deliver free cash flow. At the same time, cable operators have been losing market share to satellite TV providers, and Cox managers must decide whether to accelerate the capital-intensive deployment of digital video recorders (DVRs) to address this competitive threat. Can Cox afford to offer both VoIP and DVRs? A rewritten version of an earlier case.
Media and Broadcasting Industry;