Cable's Cut of the Biz Services Pie to Eclipse $7B
Cable's cut this year is about 14 percent ahead of last year's total, which came in at about $6 billion. Breznick expects domestic cable operators to increase their total in the category by at least $1 billion per year for the next few years. (See US Cable Firms to Bank $6B in Biz Services.)
Here's how the year has stacked up so far for some of the nation's major cable operators:
Breznick admits that his forecast is somewhat "conservative" considering that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC), the nation's two largest cable operators, have seen a growth rate in the range of 30 percent to 40 percent per year.
Comcast, for example, is already on pace to break $2 billion this year and flirt with $3 billion in 2013. Comcast's third-quarter business services revenue totals – the first in which the MSO broke the $600 million mark in the category -- would already put it on an annual run-rate of at least $2.5 billion. (See Comcast Makes Hay With Metro Ethernet .)
"There's no sign of a slowdown yet" for cable commercial-class services, Breznick said, noting that the bulk of those revenues are still originating from businesses with fewer than 20 employees.
And there's still plenty of untapped potential. Small- and mid-sized businesses alone spend $50 million to $70 million on data, voice and video services, so cable's still only managed to get 5 percent to 6 percent of the available haul, according to Heavy Reading. The nation's hybrid fiber/coax (HFC) networks, meanwhile, already pass more than 75 percent of these SMBs.
Cell backhaul services also remain on the rise for the cable guys. For U.S. MSOs, revenues from that segment will reach about $600 million this year, and approach $900 million by 2015, according to Breznick. Still, there's some debate that growth in this area could start to flatten out based on the available contracts.
"But I don't think they're nearing the ceiling on this at all," Breznick says. "The numbers aren't showing that yet. But a lot of that [future growth] will depend on what cable can do with small cells."
Covering all the facets
Breznick's market overview sets up a day-long, in-depth dive into many other facets of cable's business services strategies, including panels addressing advanced voice services, emerging cloud-based services, and a look at how MSOs are using carrier Ethernet and other tools and technologies to move up-market and target larger business customers.
Among the highlights will be keynotes from Cox Business SVP Phil Meeks, Comcast Business Services SVP and GM of New Business Solutions Kevin O'Toole; Rogers Business Solutions VP of Carrier Services Andy Striegler; and MainSpring360 Partner Will Jones.
We'll have more coverage from the event, including LRTV interviews, throughout the day.
— Jeff Baumgartner, Site Editor, Light Reading Cable