& 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 Custom TV
CommScope – Meeting the Demands of Tomorrow's Networks

3|24|17   |     |   (0) comments


Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
LRTV Huawei Video Resource Center
AMS-IX & Huawei's OSN 902

3|24|17   |     |   (0) comments


Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
LRTV Huawei Video Resource Center
Huawei's Smart Energy Innovation Center

3|24|17   |     |   (0) comments


In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
Valley Wonk
OFC & Hyperscale: A Good Mix?

3|24|17   |   01:50   |   (0) comments


Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
LRTV Custom TV
Etisalat on NFV Journey

3|24|17   |   10:37   |   (0) comments


Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 3

3|22|17   |     |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
LRTV Documentaries
No Regrets: Cox's Finkelstein on Fiber & More

3|22|17   |     |   (0) comments


At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
LRTV Documentaries
Cable Next-Gen: The 'Mile High' View From Denver

3|22|17   |   11:56   |   (0) comments


Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 2

3|21|17   |   2:27   |   (0) comments


Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
LRTV Custom TV
Driving Better Mobile Customer Experience While Transforming the Mobile Network

3|21|17   |   7:47   |   (0) comments


The Citrix NetScaler mobile gateway is an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, NetScaler can be deployed on any hypervisor, on a ...
LRTV Custom TV
Mastercard: What's Next for Mobile Payments?

3|21|17   |   7:49   |   (0) comments


2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
LRTV Custom TV
Mastercard: 2 Billion Adults 'Trapped' in Cash Economy

3|21|17   |   03:51   |   (1) comment


Despite advances made in the last several years, two billion adults around the world are trapped in a cash economy and lack what we take for granted -- a safe way to receive, save and use money. Shamina Singh, executive vice president of sustainability and president of the Mastercard Center for Inclusive Growth, chats about how Mastercard is developing new ways to ...
Upcoming Live Events
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
High-Band 5G: Let's Address the Range Question, Shall We?
Dan Jones, Mobile Editor, 3/21/2017
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
Top Priorities for B/OSS Transformation
James Crawshaw, Senior Analyst – OSS/BSS Transformation, Heavy Reading, 3/20/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
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.
At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
Animals with Phones
Neither Do We Click Here
Is that a prerequisite?
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.