Light Reading

Comcast Makes Middle Market Gains

Alan Breznick

With its recent rollout of Ethernet, hosted VoIP, and other products for midsized firms, Comcast is expanding its share of the commercial middle market while continuing to boost business services revenues to record levels. (See Comcast Plots National SIP Trunking in 2014.)

In their year-end earnings report and corresponding conference call Tuesday, Comcast Corp. (Nasdaq: CMCSA, CMCSK) officials cited progress in going upmarket by expanding beyond their base of small firms with fewer than 20 employees. They said "midsized enterprises" now account for 20% of the business services division's revenues, which translates to about $640 million.

Comcast executives also said they have now carved out a 10% to 15% market share in the small business market, which still accounts for the lion's share of their commercial revenues, or more than $2.5 billion. While that represents an increase from their previous market share estimates, they said they still have plenty of room to grow in that space. "We think there's still substantial opportunity there," said Comcast Vice Chairman and CFO Michael Angelakis, speaking on the earnings call.

The new market share estimates came as Comcast reported another record-breaking quarter for the commercial division. The company generated $876 million in business services revenues for the fall quarter, up an impressive 25.3% from $699 million in the year-ago period.

As expected, Comcast easily scaled the $3 billion revenue mark in commercial revenues for the year, becoming the first cable operator to do so just a year after it became the first to clear the $2 billion bar. The MSO racked up more than $3.2 billion in 2013, up 26.4% from nearly $2.6 billion in 2012. (See Heavy Reading: Cable Biz Sales to Hit $8.5B.)

With the latest gains, the commercial division is now the company's fourth-biggest revenue producer, having passed advertising a year or so ago. And it's now on course to overtake voice services for third place in another year.

Furthermore, Comcast executives said the commercial services unit was the second-largest contributor to revenue growth in both the fourth quarter and the entire year. Only broadband services, the company's second-largest revenue source, made a bigger contribution in those two periods.

With business services revenue showing no signs of slowing down, even after five years of 25% or more annual growth, Comcast officials said they see plenty of room for expansion, particularly with their current market share no higher than 15%. "We still see substantial opportunities for profitable growth," said Brian Roberts, chairman and CEO of Comcast Corp.

In a note to investors earlier this week, Craig Moffett, a principal in MoffettNathanson LLC, suggested that Comcast may be interested in buying Time Warner Cable Inc. (NYSE: TWC)'s large New York City, North Carolina, and New England cable clusters at least partly because of the potential for pursuing larger enterprises in those markets. Moffett wrote the note after press reports suggested that Comcast might buy those cable systems from Charter Communications Inc. if Charter succeeds in its quest to buy TWC. (See Comcast May Join Charter Team.)

But, questioned about that idea on the analysts' call, Comcast executives said they're not ready to take on the more demanding enterprise market, at least not yet. "We're focused on small and midsized companies for the time being," said Neil Smit, president and CEO of Comcast Cable.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Blogger
1/31/2014 | 5:16:53 PM
Climbing upmarket
Well, it was only a matter of time before Comcast started moving beyond the very-small-business market. Now the question is whether they can enjoy the same kind of success inthe middle market. So far, so good, or so it seems. Have the telcos taken notice yet? 
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (7) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (1) comment

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
LRTV Huawei Video Resource Center
Huawei Electric Power Summit 2015 – Addis Ababa, Ethiopia

11|16|15   |   1:28   |   (0) comments

Huawei, together with Ethiopia's Ministry of Water, Irrigation and Electricity, hosted the Huawei Electric Power Summit 2015 in Addis Ababa, Ethiopia. The event gathered industry experts and senior executives of global electric power companies to discuss emerging industry trends including: improvements in new energy conversion efficiency, reduction of line losses ...
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Sprint, Verizon Face Reorganization, Job Cuts
Dan Jones, Mobile Editor, 11/20/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Frontier Gives Telco TV a Boost
Mari Silbey, Senior Editor, Cable/Video, 11/24/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Mobily CEO Ahmad Farroukh talks to Steve Saunders about the realities of being a mobile operator in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.