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.