NICE, France --TM Forum Live! -- Enterprise customers provide the greatest growth opportunity for cable operators in Europe and North America, a panel of service provider executives concluded here this morning during the opening Cable Summit session.
Assessing a number of potential business opportunities for cable operators, including eHealth, home monitoring and security, and smart energy, the panel -- Dean Walters, CIO of Liberty Global Inc. (Nasdaq: LBTY), Cash Hagen, CTO at WideOpenWest Holdings LLC (WOW) , and Carlos Moreno, CIO at Spanish operator ONO -- agreed that building on existing success in the "commercial services" market by offering a broader range of products to a broader corporate demographic offered immediate growth opportunities.
"This is the growth area," said Hagen, adding that cable operators had done a good job already of targeting the lower end of the small and midsized business (SMB) market and could now sign up increasing numbers of midsized business customers. "The incumbent LECs do a good job at the upper end of the market, the MSOs do a good job at the low end and there is a big opportunity in between -- that's where we are focused." Developing data center/cloud services is "where a lot of our capital will be spent in the next few years," he said.
ONO's Moreno said the demand from SMBs has been "happening faster than expected," with infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) the main drivers. The SMB market currently offers "the greatest opportunity for growth for us," he added.
Liberty Global's Walters agreed. "There's a real gap in the market -- it's under-served and the most exciting area of growth for us, with great opportunities in cloud-based services."
What cable operators such as Liberty Global, which has commercial services operations in 12 markets across Europe, must do, added Walters, is ensure that they can compete against the OTT business services players. "We need to make sure we're not just providing connectivity."
Other operators across Europe might also be experiencing the same market conditions, as, according to European Commission statistics, 99% of all businesses in Europe are SMBs, noted the session's host Ed Feingold, director of strategy at Netcracker Technology Corp.
That such opportunities exist has not been lost on the cable fraternity -- it has been a growing presence in the commercial services market for some time, as Heavy Reading research pointed out in late 2013. (See Heavy Reading: Cable Biz Sales to Hit $8.5B.)
The panel was less optimistic about being able to source new revenues from other areas. Growth in the smart energy and eHealth sectors might provide a little wholesale business and some partnership opportunities, while home monitoring and security is challenging from a business model and operations perspective. "We're still figuring out what can be monetized and how we would sell [such services]. Does it include hardware, applications? There are lots of questions to answer," said Hagen from WOW!
Whatever new services might be developed, do the cable operators have the OSS and BSS capabilities to be able to deliver and bill for them, asked Feingold? The "back office" is already challenging and will need to improve, said Hagen, while Walters said new capabilities would be needed. "But as we upgrade [OSS and BSS], we are finding that we are becoming more agile."
ONO's Moreno is a bit happier with what he has in place. "We are a relatively young company, only 15 years old, so we don't have [legacy] problems. We could provide new services with the systems we have. The big challenge is with marketing," said the Spaniard.
— Ray Le Maistre, , Editor-in-Chief, Light Reading