& cplSiteName &

Comcast Makes Middle Market Gains

Alan Breznick
1/29/2014
50%
50%

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
albreznick
50%
50%
albreznick,
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
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
AT&T: Creating Dynamic Networks to Meet Business Needs

5|26|17   |   4:24   |   (0) comments


As enterprises need more dynamic networks, service providers need to deliver on-demand, virtual services to meet those needs. AT&T is creating a networking fabric to mix-and-match SDN technologies for enterprise customers, says Roman Pacewicz, AT&T senior vice president for offer management and service integration, in an interview at Light Reading's
LRTV Interviews
EdgeConneX on Industry Headwinds & Tailwinds

5|26|17   |   2:41   |   (0) comments


At Light Reading's Big Communications Event 2017, EdgeConneX CTO Don MacNeil discussed the value of partnerships in the digital world.
LRTV Documentaries
4 Steps Toward a Higher Network IQ

5|26|17   |     |   (0) comments


At the Big Communications Event in Austin, Texas, EXFO CEO Philippe Morin explains how sensors and analytics can boost a network's intelligence and enable on-demand customer experiences. Find more BCE 2017 coverage here.
LRTV Interviews
BT's McRae Sheds Light on 4K Strategy

5|25|17   |   4:45   |   (0) comments


At Light Reading's Big Communications Event 2017 in Austin, Texas, BT Group's Chief Network Architect Neil McRae talks about what it took for BT to broadcast live sports in 4K. Catch up with all our BCE coverage at http://www.lightreading.com/bce.asp.
From the Founder
How the NIA Aims to Advance NFV

5|25|17   |   08:07   |   (1) comment


Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
LRTV Custom TV
Better Solutions That Address Growing Scale

5|25|17   |     |   (0) comments


For Comcast, the X1 rollout and 17-fold increases in broadband speeds in the past 16 years are among factors driving the need for Energy 2020 solutions that reduce cost and consumption, says Mark Hess.
LRTV Custom TV
Ethernity Network Delivers Instant Offloading of Network Functions With All-Programmable Intelligent NIC

5|25|17   |     |   (0) comments


David Levi, CEO of Ethernity Networks, explains that programmability of the hardware makes the company's All-Programmable Intelligent NIC uniquely beneficial for communications service providers that need advanced data appliances with agile support of virtualization. Utilizing the company's patented network processing technology, Ethernity offers data path ...
LRTV Documentaries
BCE 2017: Vodafone Gets Obsessed With Cloud-Native

5|25|17   |     |   (0) comments


Vodafone's Matt Beal updates us on Project Ocean and explains why simple virtualization isn't enough of a goal for network transformation. Catch up with other BCE 2017 keynotes and news at http://www.lightreading.com/bce.asp.
LRTV Documentaries
BCE 2017: Intel's Take on Network Transformation

5|24|17   |     |   (0) comments


In this BCE 2017 keynote, Lynn Comp discusses Intel's vision for areas such as analytics, automation and service assurance. For more videos and BCE coverage, see http://www.lightreading.com/bce.asp.
LRTV Documentaries
Order From Chaos: The Steve Saunders BCE Keynote

5|24|17   |   17:27   |   (0) comments


Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability testing.
Think of this as the video sequel to the recent columns he's written about NFV and the prospect of a telecom app store. (See

LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Cities Clamor for More Clout at FCC
Mari Silbey, Senior Editor, Cable/Video, 5/23/2017
What's Blocking 4K TV Today
Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2017
Sonus & Genband Finally Combine to Form $745M Company
Dan Jones, Mobile Editor, 5/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
What Brogrammers Look Like to the Rest of Us Click Here
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.