The cable industry continues to be a player in business services. Its play, however, has always been different from the telephone companies.
The telcos, of course, are the incumbent in business services and are dominant. The cable industry came to business services late. For the most part, it is still a regional business. That means it has struggled, and still does, to handle the big national accounts. It does well in the mid and small tier – cable’s business units generally hustle – but isn’t the first choice for companies that want a one-stop, coast-to-coast shop.
The industry has been trying to take advantage of the vast changes in technology of the past 20 years to change that. The latest move in that direction, as reported by Light Reading’s Mari Silbey, is a new version of something that the industry has done in fits and starts for years: Band together to offer services as one. Silbey outlined the nascent project:
Light Reading has learned that some of the top US cable operators are meeting in Philadelphia this week to discuss collaborating on a national "cable first" push into enterprise services. The news follows Comcast's own enterprise service launch in September, and builds on some existing wholesaling partnerships that the big MSOs have put together to serve larger business customers.
It seems that the industry is getting considerable traction. Zacks Equity Research quoted Heavy Reading numbers that said MSOs will gain $12 billion in revenue from enterprise customers this year, a 20 percent increase over the $10 billion collected in 2014. Zacks says that Comcast “has been of late firing on all cylinders” and Time Warner Cable “is set to garner $3.3 billion in 2015, strikingly up from around $2.8 billion last year.”
The story suggests that MSOs are trying to gain a foothold with larger companies. It seems, however, that its definition – more than 100 employees – is short of what the rest of the industry classifies as a large business. Still, the piece clearly suggests that the goal is to sell services to bigger customers. Technology, such as software-defined networks and network functions virtualization (SDN and NFV) and DOCSIS 3.1, all play to that goal.
The operators are making acquisitions as well. The Zacks story mentioned that Comcast recently acquired Contingent Network Services, which it calls a deployment and managed services firm. FierceTelecom reported earlier this month that Rogers Communications has picked up Internetworking Atlantic (IAI), a business services firm, saying the reason was clear:
A key part of this acquisition is the assets it will gain to make it competitive in the business segment. As part of the acquisition, Rogers will gain a data center in Halifax, its sixteenth across the country, and an extensive fiber footprint in Atlantic Canada.
The cable industry will never dislodge the telcos. However, if it just loosens a few big customers, the investments will be worthwhile.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at firstname.lastname@example.org and via twitter at @DailyMusicBrk.