Cox wins court ruling in MVNO dispute with T-Mobile

It looks as though a Delaware Supreme Court decision has paved the way for Cox Communications to pursue an MVNO deal with Verizon if it chooses.

Cox was very close to launching a mobile business last year based on an MVNO agreement with Verizon; it was set to launch in three markets on October 15, 2021. But T-Mobile sued, saying Cox was obligated to pursue an MVNO agreement with T-Mobile based on its history with Sprint.

The Delaware Court of Chancery ruled in T-Mobile’s favor. Cox appealed that decision.

RELATED: Cox asks Delaware Supreme Court to release it from using T-Mobile for MVNO

In its decision this week, the Delaware Supreme Court reversed the earlier court decision and remanded the case back to the Court of Chancery to determine whether Cox and T-Mobile “have discharged their obligations to negotiate in good faith.”

There’s no word from Cox on what it plans to do. “We believe the market is becoming more attractive for us to enter the wireless space and we are exploring it more aggressively now but have not announced any specific plans,” Cox said in a statement provided to Fierce.

T-Mobile didn’t immediately respond to a request for comment.

T-Mobile, Verizon vie for business

Before T-Mobile entered the picture, Cox had started MVNO negotiations with Sprint.  After T-Mobile finalized its purchase of Sprint in April 2020, Cox decided to partner with Verizon, which didn’t sit well with T-Mobile. After hearing that it would not be Cox’s exclusive partner, T-Mobile accused Cox of breaching a settlement agreement.  

According to the court filing, Cox launched a formal RFP in 2020 seeking an exclusive mobile network partner for its next foray into wireless, and both Verizon and T-Mobile made offers. T-Mobile’s terms were significantly more expensive, and Ernst & Young advised Cox that T-Mobile’s proposal would “break the business case easily” for entering the mobile market.

After some back and forth, Cox estimated its offer from T-Mobile was “$90 million more expensive than Verizon’s,” the court said. (T-Mobile argued the difference was more like $23.8 million.)

The wireless industry and cable companies have a long and rather twisted history. Currently, both T-Mobile and Verizon are getting more aggressive in trying to persuade cable customers to buy their internet from them via fixed wireless. Verizon currently is the MVNO partner for Comcast and Charter Communications, which use Verizon’s network to sell mobile services.

Cox, along with Comcast and Time Warner Cable, was part of a joint wireless venture with Sprint that ended in 2008. In 2011, Cox scuttled plans to operate its own 3G network. As the fourth-largest U.S. cable operator, Cox serves around 6.5 million customers across 18 states.

Cox StraightUp Internet prepaid service is sold at Boost stores more broadly than in the past, according to Wave7 Research. Fierce reported last year that Cox was selling its prepaid internet service in two markets, Phoenix and Las Vegas, while evaluating whether to extend to other Boost stores.