& 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.
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
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
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (0) comments


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
LRTV Documentaries
China Moves Towards Mixed Ownership of Telcos

2|1|17   |   01:10   |   (0) comments


Chinese authorities are promoting new ownership models in order to raise capital.
Shades of Ray
What to Expect at MWC 2017

1|31|17   |     |   (0) comments


5G is set to dominate as the key buzz term at this year's Mobile World Congress but there are other pressing 4G matters to address.
Telecom Innovators Video Showcase
Versa: A Lot More Than SD-WAN

1|31|17   |     |   (0) comments


Kelly Ahuja, the new CEO of Versa Networks, speaks with Steve Saunders of Light Reading about how Versa offers much more than just SD-WAN, and its plan to grow market adoption in 2017.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
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
T-Mobile CEO: M&A Coming but Not Quite Yet
Dan Jones, Mobile Editor, 2/14/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
Cloudifying the Communications Network
Prayson Pate, CTO, Ensemble, ADVA Optical Networking, 2/16/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
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.