ATLANTA, Apr 16, 2002 (BUSINESS WIRE) -- Cox Communications, Inc. (NYSE: COX), a multi-service broadband communications company and one of the first to offer consumers a competitive choice for local and long distance telephone service, announced today that it has reached a significant milestone - 500,000 digital telephone customers.

"This is a remarkable achievement that demonstrates tremendous growth in a relatively short period and validates our strategy for entering the telephony business," said Jim Robbins, President and CEO of Cox Communications. "Already, we're seeing a significant contribution from Cox Digital Telephone. Less than five years after it was introduced, the service generated operating margins in the mid-twenty-percent range in 2001, and is expected to hit margins in the mid-thirties this year. Additionally, we are delighted by evidence that our telephone service helps improve customer retention."

Cox Digital Telephone was launched in Orange County, California in September 1997 and is now available to more than 3.3 million homes in nine Cox markets. Cox is already the 12th largest phone company in the nation and is second largest in some of the states in which it offers the service.

Consumer Benefits

Cox added facilities-based, circuit-switched phone service to its suite of digital products following the Telecommunications Act of 1996, which was designed to increase consumer choice, promote product development and enhance customer service in the telecommunications marketplace. Cox has since become one of the few companies to truly deliver on that promise, and is now providing a phone service that is lauded by its customers. Eighty-eight percent of Cox Digital Telephone customers say they are "satisfied" or "very satisfied" with the service, and 97% say that it is a good value.

Cox Digital Telephone costs an average of 10 percent less for the first line than phone service from many incumbent providers. On second lines, Cox customers see as much as a 50% discount (Cox customers average 1.3 lines per household). Customers who also choose Cox as their long distance carrier can realize a total monthly savings of 30% on their total phone bill, and more than 70% of customers do choose Cox as their long distance provider.

Additionally, "bundling" is an attractive option for Cox customers. Cox defines a "bundle" as two or more of the company's residential services (cable television, high speed data and phone service) provided to a single customer. More than 1 million of Cox's 6 million plus customers subscribe to a bundle of services. In addition to the discounts afforded bundled customers, these subscribers also enjoy flexible billing and payment options, one installation appointment for multiple services and the convenience of reducing the number of service providers with whom they deal. Cox is confident in the merits of its bundling strategy, reporting a 33 percent reduction in churn among bundled customers. Cox provides more information on its customer retention and satisfaction ratings in a new white paper - The Case for Cable Telephony - available at www.cox.com/pressroom.

Naturally, what is good for Cox's customers has also proven a savvy business move for the company in terms of value for its stakeholders. Cox is widely considered one of the best run multiple system cable operators, and industry analysts have gone on record to say that telephony is or will be an integral part of the service portfolio of successful cable broadband businesses. A report from the Yankee Group cites that "regulating telephony services to the back burner puts the cable operator in a compromising position for future growth since voice services will serve as one of the most important foundations for revenue growth via broadband networks." The report also adds that "carriers with an integrated video, data and voice offering will emerge as the strongest players in a given market, specifically their ability to offer a full suite of compelling communications services."

Ahead of the Convergence Curve

In addition to the telephony milestone, Cox is simultaneously announcing that it has surpassed 1 million high-speed Internet customers. The company recently completed the development of its own self-managed Internet Protocol (IP) network designed to support the Cox High Speed Internet(SM) service and future enhanced broadband-based services, including those that integrate voice and data.

The creation of the new IP network will allow Cox to expand its telephony offerings using an arsenal of technologies and architectures such as Voice over Internet Protocol (VoIP). Cox believes that telephony services based on VoIP architecture can be developed and integrated with its current circuit-switched offerings in the near future. "Cox now has the flexibility to match a specific technology to the dynamics and potential of a given market or community, opening the door to future opportunities across the company's entire footprint," said Robbins. For instance, Cox may be able to provide phone service to areas within markets that do not provide the business case for a circuit-switched investment.

"The bottom line is that we have the experience and financial model to be able to continue expanding our telephony operations without stranding capital," said Robbins. "That is a capability other companies just can't match."

Acerca de Cox

Cox Communications, a Fortune 500 company, serves approximately 6.2 million customers nationwide, making it the nation's fifth largest cable television company. A full-service provider of telecommunications products, Cox offers an array of services, including Cox Cable; advanced digital video programming services under the Cox Digital Cable brand; local and long distance telephone services under the Cox Digital Telephone brand; high speed Internet access under the brands Cox High Speed Internet, Road Runner and Cox Express; and commercial voice and data services via Cox Business Services. Cox is an investor in programming networks including Discovery Channel. More information about Cox Communications can be accessed on the Internet at www.cox.com/espanol.

Editors note: A white paper detailing information on Cox's telephony efforts is available at www.cox.com/pressroom.

Editors Note: A press release providing additional information on Cox's success in high speed Internet service is available at www.cox.com/pressroom.

CONTACT: Cox Communications, Inc. Laura Oberhelman, 404/269-7562 Laura.Oberhelman@cox.com