& cplSiteName &

TWC: We'll Give Comcast a Business Boost

Alan Breznick
3/14/2014
50%
50%

If there's one area where Time Warner Cable could teach Comcast a thing or two, it's probably on the business services front. At least Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) seem to think so. Speaking at two recent investment conferences on opposite ends of the US, top executives of both major MSOs contended that Comcast's pending buyout of TWC should help the combined company capture more commercial revenue than the two MSOs could capture on their own.

In the more recent case, TW Cable chairman and CEO Rob Marcus claimed that his company could help Comcast extend its reach beyond smaller companies, which now account for the vast bulk of Comcast's commercial revenues. Speaking at the Deutsche Bank Media, Internet, and Telecom conference in Palm Beach, Fla., earlier this week, Marcus said the addition of TWC would enable Comcast to pursue more midsized and larger companies and generate even more revenue. (See Comcast Makes Middle Market Gains.)

"It's a maturation process," he said, noting that Comcast entered the commercial market later than TWC. "Comcast is now more focused on SMBs."

The comments by Marcus align with what top Comcast officials have been saying. For instance, Comcast vice chairman and CFO Michael Angelakis said the proposed TWC acquisition would enable his company to beef up its commercial presence by adding such premier business markets as New York, Los Angeles, and Dallas. Speaking at the Morgan Stanley 2014 Technology, Media, and Telecom conference in San Francisco last week, Angelakis said TWC could particularly help Comcast break into the hard-to-crack enterprise market.

In his Palm Beach appearance, Marcus also contended that TW Cable could help Comcast boost the share of overall revenue that its business services division contributes. Although Comcast now rakes in far more revenue from business services than any other major North American MSO, that's due largely to its much bigger footprint, which is at least twice as large as any other cable operator's reach.

Indeed, even though they trail well behind Comcast in the commercial revenue rankings, both TWC and Cox Communications Inc. actually take in more business services receipts, in proportion to their sizes. As a result, the commercial sector contributes a greater share of their overall revenues than it does for Comcast.

For example, as Marcus spelled out, TW Cable's commercial haul of $2.3 billion last year accounted for about 12% of the MSO's total revenue. In contrast, Comcast's much larger commercial haul of $3.2 billion accounted for about 9% of its overall revenues in 2013. "I would expect the [business services units'] percentages of total revenues to grow for both companies," he said. (See Meeks Sees Business Boom at TWC.)

Moreover, Marcus said, the union of Comcast and TWC should enable the combined company to compete better for national and even international business prospects. With the major TWC markets added to its portfolio, Comcast would have its cable networks in an impressive 19 of the top 20 US markets, leaving Phoenix the only top 20 market not represented.

With this kind of enhanced market presence, he said, the new Comcast could take on Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), and other big telecom players in the large enterprise space. There are "potentially huge opportunities" on the business services side, he noted, rhapsodizing about the possibilities of offering "one-stop shopping" for big national and international customers.

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

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/17/2014 | 1:24:20 PM
TWC: We'll Give Comcast a Business Boost
Mitch, that can make this a very smart move!
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/17/2014 | 1:14:41 PM
Re: TWC: We'll Give Comcast a Busikness Boost
Clearly, this acquisition is about more than just making a big company even bigger. It fills a big lacuna in Comcast's offerings. 
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/17/2014 | 12:42:11 PM
TWC: We'll Give Comcast a Business Boost
@Phil, Exactly.  Comcast may feel they have "the answers".  If they incorporate TWC's answers as well they can have the best of both worlds.
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
3/17/2014 | 11:09:55 AM
Re: TWC: We'll Give Comcast a Busikness Boost
Indeed, the management of the transition will be critical. In some mergers, the acquiring company will want its processes adopted across the expanded enterprise, even if in some instances the acquiree had a better mousetrap.

So it remains to be seen if Comcast will adopt some of TWC's business strategies.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/15/2014 | 6:41:14 PM
The one with the red logo
The Economist -- yes, The Economist -- has come out against the Comcast/TWC merger, saying it would hamstring innovation and lead to higher prices for continued weak service. I can't say I agree with the logic, but the fact that this usually friendly business organ is playing this tune is noteworthy.
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/14/2014 | 10:42:44 PM
Carrier Ethernet
Both companies have been pretty aggressive with Carrier Ethernet, though TWC even more so, with the complete set of eight CE 2.0 certifications. I believe Comcast also has CE 2.0 certification to some extent. It would be nice to see the combined company leverage that fact for competitive differentiation.
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
3/14/2014 | 6:47:21 PM
TWC: We'll Give Comcast a Busikness Boost
Alan, great analysis.  It sounds as if TWC has the better overall business agility and capability.  The question may be whether Comcas will learn from TWC or try to fit TWC into its model; a key question always with M&A.  I guess the key will be how well they manage this transition.

 
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
3/14/2014 | 6:41:50 PM
SMBs...that could be a great plus
Alan, it is nice to see that these companies are actually focusing on a hugs business sector - small and medium size businesses.  That shear number of them is much greater than the number of large businesses and their needs are very different.  I hope that they do a great job here with innovative and cost effective solutions in this sector.
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Between the CEOs
    CEO Chat: Deepfield's Craig Labovitz

    4|21|16   |     |   (0) comments


    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Shades of Ray
    Leading Lights 2016: Shortlists Announced

    4|20|16   |   0:53   |   (0) comments


    The judging is over and the Leading Lights 2016 shortlists have been published -- you can see who made the cut by clicking on this link.
    LRTV Custom TV
    Introducing MulteFire – Qualcomm at MWC 2016

    4|18|16   |   3.29   |   (0) comments


    MulteFire is the latest option for using LTE in unlicensed spectrum. As oppose to its close 'siblings', LAA and LTE-U, MulteFire operates solely in unlicensed spectrum, which enables it to offer the best of two worlds – LTE-like performance with WiFi-like deployment simplicity. In this interview, Sanjeev Athalye, Sr. Director, Product Management at Qualcomm ...
    Between the CEOs
    CEO Chat: Grant Van Rooyen of Cologix

    4|18|16   |     |   (0) comments


    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    LRTV Huawei Video Resource Center
    ONS 2016 – Demonstration of Huawei's NetMatrix Multi-Vendor SDN Orchestrator

    4|15|16   |     |   (0) comments


    This demonstration shows how Huawei's NetMatrix SDN Orchestrator (SDN-O) addresses an operator's core service agility needs for services spanning multi-domain, multivendor networks: it includes a demonstration of:
    - Rapid New Service Design: using YANG to model a complex example of multi-domain, multivendor L3VPN network connectivity service that ...
    LRTV Custom TV
    AT&T Wants to Own North Carolina

    4|15|16   |     |   (1) comment


    Venessa Harrison, president of North Carolina for AT&T, tells how the company will expand its GigaPower service beyond the seven N.C. cities it already serves.

  • This blog, sponsored by AT&T, is the second part of a ten-part series examining next-generation broadband technologies titled "Behind the Speeds."
  • Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    FCC Poised to Re-Regulate Wholesale Access
    Carol Wilson, Editor-at-large, 4/28/2016
    Amazon AWS Reports $2.6B Quarterly Revenue, Up a Colossal 64%
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/28/2016
    Mitel Asks: What Time of Day Do You Shower?
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.