Cable business services revenue up 20% to $12 billion, analyst says

Revenue from MSO business services divisions is set to finish 2015 up 20 percent year-over-year to $12 billion, according to report from Zacks Equity Research. 

Comcast (NASDAQ: CMCSA) remains the biggest operator in the commercial services sector, and is on track to yield $4.7 billion in business services revenue this year, up 20 percent over 2014. Time Warner Cable (NYSE: TWC) is second in commercial services market share. Its business service revenue is projected to finish up nearly 36 percent to $3.3 billion. 

"For quite some time now, MSOs have been aggressively targeting the small- and medium-sized business (SMB) segment, which is the core area of operation for telecom operators," the report said. "Various industry researches estimate that the SMB segment is expected to offer a $20 billion to $30 billion market opportunity, going ahead."

The report also highlights Comcast's aggressive investment in the commercial sector. For example, the company acquired Cincinnati-based managed services company Contingent Network Services in September for an undisclosed sum.

Comcast also launched a dedicated enterprise services division and is conducting trials of 2 Gbps Internet services targeted to the commercial market.

Comcast said during its third-quarter earnings call in October that business services has been its second largest contributor to overall cable revenue growth for 18 of the laste 19 quarters. The company's third-quarter business services revenue rose 19.5 percent to $1.2 billion. 

"On business services, enterprise growth, it's a continuation of what we're doing," said Comcast CFO Michael Cavanagh, speaking to investors. "We are investing and it is a big source of capital investment that you've seen in the recent past and that's going to continue. But we're going to layer on businesses of a bigger scale that have the profile of the medium size enterprises that we already have."

Zacks added, "Going forward, we believe, cable MSOs have plenty of untapped opportunities in the business services market, particularly in the mid and large-sized business segment."

For more:
- read this Zacks report

Related articles:
RCN Business jumps into the 100G Ethernet game
Cox Business will deliver turnkey small cell services through industry partners
Cox Business serves up small cell solution for wireless operators

Suggested Articles

Comcast is calling on its cable brethren, Charter and Cox, for a new initiative called On Addressability focused on building a “sound, scalable and sustainable…

NCC Media and OpenAP are teaming up to allow national advertisers to use OpenAP’s audience segment definitions when buying across NCC Media’s linear, VOD and…

Comcast is launching new controls for its X1 television service that will allow people with certain disabilities to operate their cable TV systems using their…