Cable Business Services

Business Services Finally Getting Respect

Unlike the late comedian Rodney Dangerfield, the cable business services sector is finally getting the respect that it deserves these days.

Until recently a backwater for most major US MSOs, commercial services have emerged as the hottest growth sector for many of them. In fact, at a time when residential services growth appears to be stalling for most MSOs, business services are standing out as the only big growth sector for the industry right now.

Take Time Warner Cable Inc. (NYSE: TWC), for example. In what was likely its most dismal quarter ever, TW Cable reported losing 306,000 basic video, 24,000 broadband, and 128,000 phone customers in the third quarter. Total customer relationships fell by either 117,000 or 131,000, depending on which of the company's two different subscriber metrics you choose. (See: TW Cable Hemorrhages Subs.)

Yet there was one clear bright spot for TWC amidst all the gloom. The company actually gained 14,000 commercial customer relationships in the summer quarter, boosting its total over the 600,000 mark. As a result, its business services revenues climbed to a record $594 million for the quarter, up 20.5 percent from $493 million a year earlier.

Rightly characterizing these results as "outstanding," Time Warner Cable executives proudly boasted that this was their 14th straight quarter of 20 percent or more growth in business services revenues. They also noted that they're closing in on an annual run rate of $2.5 billion in commercial revenues.

In an upcoming story, I will run through the latest business services results for all of the big publicly traded US MSOs, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. , Cablevision Systems Corp. (NYSE: CVC), Suddenlink Communications , and WideOpenWest Holdings LLC (WOW) . But suffice it to say that TW Cable is certainly no exception here.

So, with commercial services now at least an $8 billion business for the US cable industry, MSOs are finally investing heavily in it, boosting both their capital and operational spending. They're also expanding their sales and customer service teams dedicated to the commercial sector.

Here at Light Reading, we're doing our part as well. In just over two weeks, we'll hold our seventh annual Future of Cable Business Services conference in New York on Wednesday Dec. 4. Similar to the previous six events, this one-day conference will look at the growth trends in the business telecom services market, the opportunities for cable operators, and the challenges they face in pursuing those opportunities. In particular this year, our team of industry experts will explore the opportunities and challenges of going up-market as cable providers increasingly seek to serve midsized firms and large enterprises.

Also, for the first time, we will stage a live chat session about cable business services on a special Light Reading message board on Thursday Nov. 21. In this real-time session, Senior Editor Sarah Reedy and I will tackle your questions about this high-growth sector.

The live chat will start at 11:00 a.m. EST (8:00 a.m. PST) and last an hour. So be there or be square. And sign up for the conference if you'll be in the New York area the week after Thanksgiving. We still have a seat or two left.

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

Interested in learning more on this topic? Then come to a Light Reading Live event that takes place Wednesday, December 4, 2013, at the Westin Times Square in New York City. Back by popular demand for the seventh straight year, The Future of Cable Business Services 2013 is a one-day conference that will examine the progress that cable operators are making in the roughly $140 billion US business telecom services market and the challenges they face in keeping up the momentum. For more information, or to register, click here.

mendyk 12/11/2013 | 11:10:03 AM
Re: Business services Yes -- poor planning on our part.
brookseven 12/11/2013 | 10:54:02 AM
Re: Business services  


So you need reliable communications and you have not dual homed things?

mendyk 12/11/2013 | 10:44:53 AM
Re: Business services The outage lasted over two hours. Don't know what kind of customer outreach was done. But five-nines is a distant memory.
albreznick 12/10/2013 | 9:59:52 PM
Re: Business services Oy. Not good, Dennis. So how long did the power stay down and how ewell did Comcast respond? Think Verizon would have done any better? 
JgWelz 11/22/2013 | 11:34:16 AM
Finally getting respect - Needs faster customer acquisition Alan,

Great article as always, it is nice to see that Biz Svcs is finally getting it's day in the sun.  

There's no doubt that MSO's are the most well positioned to capatalize on businesses near insatiable demand for capacity and clearly it's become a big part of the industries growth story.  One has to ask however, if B2B growth for instance in the case of TWC in Q3 is merely 10% of the aggregate subscriber loss overall, what can be done to close that gap?  How do MSO's grow their B2B business faster than the decline of the core business?  Taking the residential scale model that MSO's have so effectively built and applying it as a "force multiplier" to advanced B2B services such as MetroE and IP voice, seem to be a good start.  IMHO.

mendyk 11/21/2013 | 10:36:38 AM
Re: Business services As I'm typing this, our Boston office has lost telecom and Internet service and has been down for going on one hour now. The network provider is Comcast.
albreznick 11/20/2013 | 9:50:14 AM
Re: Live chat link Thanks a lot, Sarah. And welcome back.  Looking forward to tackling everyone's questions tomorrow morning.  
Sarah Thomas 11/20/2013 | 9:40:19 AM
Live chat link I'm looking forward to chatting with you, Alan! For everyone looking to join tomorrow, you can do so right here: http://www.lightreading.com/messages.asp?piddl_msgthreadid=57474&piddl_msgid=153706&piddl_msgtocontent=yes&piddl_msgposted=yes#msg_153706

Looks like the convo is already getting started!
albreznick 11/19/2013 | 9:38:56 PM
Re: Business services Good point, Dan. Shoe on the other foot and all that, eh? Well, the telcos are going after the pay TV business at least partly because the cable cos are going after the commercial services business. We shall see which bet pays off better.
DOShea 11/19/2013 | 9:07:05 PM
Business services This sector is a great outlet for cable to be the quick, nimble, nothing-to-lose competitor, rather than the bloated, miserly incumbent. Now, the cable industry knows how Verizon and AT&T feel about the pay TV services business.
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