Cable Business Service Growth Continues for Operators, Executives Say
The executives see opportunities to add customers because they contend they're bucking some telcos’ trend of centralization of small-business services. When telcos turn off certain copper-based services, that may also provide an opportunity for cable operators, said panelists. “I certainly would never underestimate the power of companies like AT&T and Verizon Business” when it comes to marketing, said Time Warner Cable Chief Operating Officer-Business Services Phil Meeks. “We should be faster than a $100 billion telephone company.” Such firms have moved “to a much more of a centralized customer experience” often with call centers located far from business customers, said Meeks.
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Time Warner Cable, with business sales rising 20 percent a year, eyes a continuation of that trend through doubling the business in the next five years, said Meeks, recently hired by the operator from Cox Communications. “It’s like the old joke, why do people rob banks? Because that’s where the money is."
The market for Internet and other communications services for small and mid-size firms is expanding, said a telecom consultant. Small firms will spend $18.5 billion this year on Internet access, on which mid-size firms will spend $6.2 billion, said Compass Intelligence Chief Strategist Kneko Burney. “Up market for MSOs right now would be mid-size businesses,” she said of multiple system operators. Being a vendor to such firms means there is “significantly more complexity to serve,” though they also spend 5 to 10 times more on average than small businesses, she said.
With many companies having a bring-your-own-device policy, they're not seeking a wireless product from Bright House, said President Nomi Bergman. “They are looking to us to manage the complexity of the business” in that such clients “don’t want to worry about the cybersecurity of their network” and want Bright House to do that, she said. Burney said it’s better to have a wireless product, which “gives you more relevance to the customer,” though she wouldn’t encourage a client to build a wireless network to compete.
Selling fiber backhaul services to carriers is a growth area for cable operators, the executives said. “When we light up towers for these wireless providers, that physically expands our network for adjacent sales opportunities,” said Meeks. Carriers moving to small-cell capacity may also boost operators’ businesses, he said. Suddenlink can expand the portion of commercial sales it gets from selling cloud-based, hosted products to smaller firms “if we do our jobs right,” said Chief Financial Officer Mary Meduski. She said such customers are “stickier” -- less likely to disconnect service -- “and we are taking the jobs for which they do not have IT departments.”