February 29, 2008
Heads up, telcos. Comcast Corp. (Nasdaq: CMCSA, CMCSK) is about to put the full court press on one of your most lucrative lines of business.
Following a slower-than-anticipated start, the pieces are in place at Comcast for a “major unveiling” of the MSO’s “Business Class” services offering sometime next month, a top cable sector analyst revealed in a brief report issued today.
“Unlike in prior new product initiatives, they [Comcast] anticipate a full-scale deployment across all systems simultaneously, rather than the rolling geographic model they have used in the past,” wrote Sanford C. Bernstein & Co. Inc. analyst Craig Moffett, who based his findings on a recent meeting with Comcast chairman and CEO Brian Roberts and CFO Michael Angelakis.
Rather than targeting the large, enterprise sector, Comcast is expected to offer a bundle of broadband services geared for small and medium-sized businesses. In 2006, Comcast hired Bill Stemper, the former head of Cox Communications Inc. ’s business services division, to head up the initiative.
The SMB topic came up during Comcast’s fourth quarter earnings call. Comcast Corp. COO Steve Burke expressed he was impatient with the speed of Comcast's SMB rollout compared to some of its cable peers. For 2007, the SMB component of Comcast racked up $384 million, up 46 percent from the previous year. Moffett said business services represent just 1 percent of Comcast’s revenues, but the same service category represents 10 percent to 15 percent of revenues at Cox.
Despite the sluggish start, Comcast clearly has grand SMB plans. On the call, Comcast said it had 2,100 people dedicated to the SMB project, and suggested a goal of $2.5 billion in SMB-related revenues by 2011. (See Comcast Spreads the Love .)
Citing Roberts, Moffett said Comcast’s commercial products, including multi-line VOIP gear, are in place, and the associated advertising and marketing materials are ready to go. Comcast officials were not immediately available Friday for further comment about its apparently imminent SMB coming out party.
What's up with wireless?
While SMB is high up on Comcast's agenda, wireless apparently has moved down a notch or two.
Roberts downplayed the role of wireless from an infrastructure point of view, a move (or non-move, in this case) that investors would likely prefer, considering the capital outlay such a buildout would represent. There is considerably more interest in an open access model touted by Google (Nasdaq: GOOG) and, more recently, Verizon Communications Inc. (NYSE: VZ). (See Verizon Tears Down the 'Walled Garden' .)
“In an open access world, Comcast would envision itself as a network-agnostic application,” Moffett said, pointing to the MSO’s Fancast platform among the possible candidates. (See Comcast Fires Up Fancast.)
And that view of the MSO’s wireless ambitions closely mirrors those held by our own Michael Harris in a column published earlier today. (See Cable’s Wireless Future .)
— Jeff Baumgartner, Site Editor, Cable Digital News
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