Cable Gets Down to Business
Heavy Lifting Analyst Notes Alan Breznick, Cable/Video Practice Leader, Light Reading 11/20/2008
We're getting ready for Light Reading's The Future of Cable Business Services conference in New York on December 2, marking the second year of this event. With the spotlight on commercial services next month, this seems a good time to review the latest progress on this front by four major U.S. MSOs, as revealed in their most recent earnings reports.
Time Warner Cable Inc. (NYSE: TWC), the first MSO to spell out commercial services subscribers and revenues in its quarterly earnings statements, disclosed earlier this month that it broke the $200 million revenue barrier for the category, up 20 percent from last year's third quarter. The nation's second-largest MSO said commercial revenues are now growing more than twice as fast as residential revenues, accounting for about 10 percent of the company's total year-over-year revenue growth.
Breaking its numbers down further, Time Warner said it added 8,000 commercial high-speed data subscribers in the summer quarter, boosting its grand total to 295,000. It also added 7,000 commercial voice customers in the quarter, increasing its total to 23,000. And it just began offering its "Business Class Ethernet" service for small-to-medium-sized businesses (SMBs) over coaxial cable lines.
Comcast Corp. (Nasdaq: CMCSA, CMCSK) revealed that its business service group brought in $145 million in the third quarter, up 42 percent from the year-ago period. Following in Time Warner's footsteps by about a year, the nation's biggest MSO is currently rolling out commercial voice service throughout its markets. Boosting its initial projections slightly, Comcast is now aiming to capture 20 percent to 25 percent of the SMB market over the next few years.
Charter Communications Inc. said its business services revenue in the third quarter climbed 16 percent over last year. With the company now promoting its new commercial voice service heavily throughout its markets, it boasted that its business phone customer count has more than doubled so far this year.
Finally, Cablevision Systems Corp. (NYSE: CVC) disclosed that its quarterly business services revenue grew 48 percent year-over-year. The company, which is now focusing its efforts on the estimated 640,000 SMBs in its New York-area franchise territory, said it has already signed up 20 percent of these firms as customers.
At the same time, Cablevision said its more established Optimum Lightpath unit, which concentrates on larger enterprises, boosted its revenue by 13 percent in the summer quarter. Optimum Lightpath recently lit up its 3,000th building with fiber connections.
So, while growth may be slowing down for cable operators on the residential side because of the slumping economy, it's clearly still picking up on the commercial side. Will this continue? Come find out what's in store for cable business services in 2009. We look forward to seeing you at the event.
— Alan Breznick, Senior Analyst, Heavy Reading
Interested in learning more on this topic? Then come to The Future of Cable Business Services,a one-day conference that will explore the impact cable operators are having on the swiftly expanding $130 billion-plus U.S. business services market. To be staged in New York City, December 2, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.