Have Cable Business Services Topped Out?

The US cable industry is now pulling in close to $18 billion in annual revenues from commercial services, but the growth rate is falling. How much lift is left for cable?

Alan Breznick, Cable/Video Practice Leader, Light Reading

October 18, 2018

4 Min Read
Have Cable Business Services Topped Out?

In less than two decades, cable operators have built a huge business out of business services from scratch. In the US, for example, commercial services now generate close to $18 billion annually for the cable industry, up from less than $2 billion a dozen years ago, according to the latest tally by Heavy Reading.

The four biggest US MSOs -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. , Cox Communications Inc. and Altice USA -- each now produce well over $1 billion a year in business revenues while the next three largest operators -- Mediacom Communications Corp. , WideOpenWest Holdings LLC (WOW) and Cable One Inc. -- each generate well over $100 million in commercial revenues.

Indeed, Comcast alone is on track to hit $7 billion in commercial revenues this year, up from about $6.2 billion last year. Charter Spectrum is not far behind and should close in on $6.1 billion this year, up from about $5.9 billion in 2017.

While cable operators continue to boost their commercial revenues, their growth rates are steadily slowing down from the hefty double-digit percentage hikes they were racking up just a couple of years ago. With the notable exception of market leader Comcast, which reports that business revenues are still climbing about 11% on a year-over-year basis, the industry is now seeing annual revenue increase in the mid-single digits.

Of course, at least some of that growth rate slowdown is due to the larger denominator. It's a lot harder to grow 25% a year when your base revenues are $1 billion rather than $50 million. But at least some of it may also be because cable operators, having already signed up millions of small and midsized business customers, are starting to run out of runway in the commercial market.

Well aware of this dilemma, cable providers are taking steps to maintain their growth momentum. They are installing more fiber in their networks, hiking broadband speeds and investing in more advanced services like SD-WAN, managed security, video monitoring and surveillance, industrial IoT and wireless WAN backup, among other things. Many are also moving into the enterprise space, hoping to make the same kinds of inroads with large businesses that they made in the small and midsized business sectors. (See Comcast Business Positions Itself 'Beyond Fast' and Why Cable Is Getting Real About NFV & SDN .)

How successful will all these measures be for cablecos? What new challenges must they overcome? What other steps could, and should, they take?

We will tackle all these questions and more when we convene in New York on Nov. 15 for Light Reading's annual Future of Cable Business Services conference. The one-day live event, now entering its 12th year, is the premier independent conference focusing on the cable industry's continuing efforts in the commercial services space. Senior executives from eight of the ten biggest US MSOs -- Comcast, Charter Spectrum, Cox, Altice USA, Mediacom, Cable One, RCN and Atlantic Broadband -- will discuss their strategies there. Plus, several industry analysts will be sharing their insights into the market.

Our keynote speakers will be Hakim Boubazine, Co-President and COO of Altice USA; John Jason Brzozowski, Fellow at Comcast's machineQ; Matt Davis, Founder and Principal Analyst at Independence Research; and Jen Hensley, President of Link. Other prime speakers include: Chris Bastian, SVP/CTO at SCTE/ISBE; Jeff Lewis, VP of Data Product Management, Comcast Business; Jody Hagemann, Director of Product Management, Comcast Business; David Hicks, VP of Engineering and Operations, Cox Communications; Brian Rose, Senior Director of Product Development, Cox Business; Drew Davis, Executive Director of Wireless Technology, Cox Communications; Kristi Salmon, Senior Director of Marketing and Business Services, Mediacom; Chris Boone, VP of Business Services, Cable One; Patrick Knorr, EVP/Chief Commercial Officer, Wave Broadband, Grande Communications and RCN; and Gerardo Garza, VP of Business Sales, Atlantic Broadband.

Now entering its second decade, the Future of Cable Business Services event is the premier independent conference focusing on the cable industry's continuing efforts in the commercial services market. Join us on November 15 in New York; all cable operators and other communications service providers get in free!

Mark Nov. 15 on your calendars now for a date with the biggest and most innovative players in the cable business services space. Please click here to get more information and sign up for the conference.

Hope to see you all in the Big Apple.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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