CABLE NEXT-GEN BUSINESS SERVICES DIGITAL SYMPOSIUM – Cable business service revenues and customer growth both slowed down during the first couple years of the pandemic, but those metrics are clearly on the upswing again as we near the end of 2022.

While the days of double-digit growth appear to be over, US cable commercial revenue growth is poised to hit 6% in 2022, up from just 2% in 2020 and 3% in 2021, Alan Breznick, cable/video practice leader at Light Reading and a Heavy Reading analyst, noted today in opening comments at Light Reading's 16th-annual event focused on cable business services, citing data from CMG/S&P.

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"There are signs of things pointing up again for the [cable] industry," Breznick said.

US cable is expected to bring in $20.5 billion in total commercial services revenues in 2022. Broken down by segment, small businesses (up to 19 employees), at $14.6 billion, will continue to represent the lion's share, followed by medium businesses (20-99 employees), at $3.3 billion, and large businesses (100-plus employees), at $2.6 billion.

Commercial customer growth is estimated to reach 5% in 2022, down slightly from 2021 levels, but almost doubling the growth rate seen in 2020, when businesses across the country were hit by pandemic-driven shutdowns and lockdowns. Breznick estimates that US cable has about 5.5 million commercial customers.

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Average revenues per unit (ARPU) among cable business customers have generally flattened out. After hitting a high-water mark of $320 in 2018 and 2019, segment ARPU is expected to dip to $313 in 2022.

New challenges for small businesses

In a follow-up keynote conversation, Christopher Boone, senior VP of business services and emerging markets at Cable One, acknowledged that the commercial services market is returning to a faster rate of growth. However, businesses – and smaller businesses, particularly – are feeling labor and inflationary pressure as things continue to open up.

"Everything is expensive, including labor, and it's hard to find [workers]," Boone explained. "For the small business owner, I think it's pretty tough right now."

During the earlier phases of the pandemic, Boone said Cable One didn't emphasize new work-from-home products but instead focused on the broader customer experience. For example, Cable One put some customers on a seasonable pause for the first time, forgave early termination fees, issued credits and, where appropriate, helped customers move to lower-level services.

"We really threw the rulebook out and just said, do what it takes to take care of the customers," he said. Even if some small businesses fail, the hope is that those entrepreneurs will return and choose Cable One again, remembering that the company did right by them when times were tough.

Moving forward, he said Cable One will stick to its knitting and focus on connectivity rather than look to expand its product line for the business segment.

"I think our product menu needs to look like In-N-Out and not The Cheesecake Factory," Boone said, noting that Cable One has opted to sit on the sidelines with product categories such as SD-WAN. "We're pretty cautious in terms of new product launches ... We feel that connectivity is really our sweet spot."

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— Jeff Baumgartner, Senior Editor, Light Reading