Comcast Expands Business Services

Zacks

Comcast Crop. (CMCSA), the largest cable TV operator in the U.S., is quickly shifting its focus from the small-sized business segment to the mid-sized business segment. Recently, the company entered into a deal with hospitality real estate developer and management firm, Raymond Management Co., to provide triple-play bundled voice, video and data services to 7 hotels in the greater Chicago area and Ann Arbor, Mich.

The SMB segment has become a huge growth opportunity for the cable TV industry. Large cable TV operators such as Comcast and Time Warner Cable Inc. (TWC) are immensely exploring this segment as a counter strategy to protect their loss in the legacy video offering market as telecom giants like Verizon Communications Inc. (VZ) and AT&T Inc. (T) are aggressively offering fiber-based video services.   

Significant growth of business data and video traffic resulted in an unexpected future growth catalyst. Furthermore, managing wireless backhaul traffic for the mobile towers also opened up a multi-billion dollar market. Cable operators are now gradually offering innovative wireless broadband services to their business customers in order to maintain this momentum.

Various industry researches estimate that the SMB segment is expected to offer a $20 billion to $30 billion market opportunity. Comcast’s Business Hospitality division provides an integrated package of voice trunking, Ethernet-based Internet and HDTV services. For small-sized enterprises, the company is providing metro Ethernet services in most of its point-of-presences.  

Comcast generated over $2.4 billion of revenues from the small and mid-sized business segments in 2012. However, in the first quarter of 2013, the company generated a record-high $741 million of revenues from this SMB segment. Comcast is expected to generate $3 billion of revenues from this segment in 2013.

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