Comcast Business may not be the size of large telco competitors AT&T and Lumen, but it is finding a growing niche in medium and enterprise business customers.
During its first-quarter earnings call, Jason Armstrong, Comcast's CFO, told investors that Business Services Connectivity revenues increased due to increased revenue from small business customers. Higher average rates and increased revenue from medium-sized and enterprise customers drive this.
Business Services Connectivity revenue grew 5% to $5.1 billion, up from $2.3 billion in the same period last year.
“Despite the increasing competitiveness in the SMB market, we are resolute in our commitment to defend our position. For business services connectivity, we achieved a 5% revenue growth, driven by higher ARPU in small business and broader growth in customers and additional solutions for mid-market and enterprise,” said Jason Armstrong, Comcast's CFO.
Driving APRU revenue growth
Comcast Business will drive new revenue opportunities by enhancing ARPU through selling new mobile and security products.
On the security end, Comcast Business SecurityEdge helps protect all connected devices on your network from malware, phishing scams, ransomware, and botnet attacks.
In tandem with SecurityEdge, Comcast Business also offers business continuity platforms, including Connection Pro and WiFi Pro. ConnectionPro, which offers up to 16 hours with powerful 4G LTE backup, could be helpful to a business that’s suffering a power outage. Meanwhile, WiFi Pro can provide business customers with up to four separate networks for connectivity.
“Similar to this quarter, we'll grow revenue by increasing ARPU, driven by higher adoption of additional products like Mobile, Security Edge, Connection Pro, and Wi-Fi Pro and through targeted rate opportunities,” Armstrong said.
Comcast Business also finds that its managed services and security services are resonating with larger business customers. “Meanwhile, our momentum continues to build in mid-market and enterprise as our expanding capabilities in managed services, wide-area networking, and cybersecurity have led to increasing customer wins and expanding existing relationships,” Armstrong said.
Facing fixed wireless competitors
Despite the market gains Comcast Business is making, the service provider is facing new competitive threats from aggressive broadband wireless providers.
For example, large competitors like Verizon added 151,000 new business customers to its broadband wireless service during the first quarter.
David Watson, president and CEO of Comcast Cable, acknowledged that it faces competition from three main fixed wireless competitors in the business and residential sectors.
“The SMB market has become a bit more competitive, and fixed wireless is a part of that,” he said. “When you have that much all at once, there's some impact. So, we're seeing it in SMB. It's unique to SMB. But our game plan consistently has been to focus on both the share and the overall -- rate, and we have a great slate of products.”
Watson emphasized that Comcast Business will focus on product innovation and network uptime.
“We have multiple segments within Business Services, mid-market, and enterprise, which offset a lot of this, and we have great product road maps,” he said. But the really important point is that as you feel competitive pressure, I think it's important to keep in mind, uniquely to SMB, that reliability and ubiquity of our products and business services are key here.”
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