Business Services: Business Is Good

By Ron Hendrickson

While multiscreen video hogs the headlines, cable's business services keep plugging reliably along, just out of the limelight, but adding customers, revenue and route miles. And now they're accelerating.

Cable's business services arm, which largely started with (and still serves) small and medium-sized businesses (SMBs), is increasingly reeling in bigger fish, including larger enterprises, schools and government organizations.

Last week, Cablevision's (NYSE:CVC) biz services division Optimum Lightpath, long known for its fiber network, expanded its offerings with a managed WiFi service targeted at mid-sized and large enterprises in and around New York. In late August, Comcast (NASDAQ:CMCSA) Business Class announced a deal with the Community College of Baltimore County for Ethernet services, and even received recognition from Frost & Sullivan for its Ethernet services. Comcast notched up several other business wins earlier in the summer, while Bright Housescored in Florida with the Orange County Public Schools.

The business buildup is also driving network upgrades and expansions, as well as service upgrades.

Just last week, cable biz services pioneer Cox Communicationslaunched two new DOCSIS 3.0-based business-class tiers in Louisiana, 80 and 100 Mbps respectively, and plans to roll the tiers to more markets later this year and into 2013. Cox also keeps busy in cell backhaul and laid out some of its plans for that space in mid-August.

Also last week, Comcast added 24/7 tech support for its small business customers in the form of its Business Class Signature Support, which covers not only cable service but also CPE, including computers and mobile devices, as well as servers and networks. It initially launched in the MSO's Northeast Division and is expected to hit the rest of Comcast's footprint by year's end.

Time Warner Cable's (NYSE:TWC) biz services division is spending about $100 million on fiber upgrades and plant expansion throughout New York State, of which about $25 million is being spent in New York City itself. The MSO also deployed WiFi from Ruckus Wireless in the 19,000-seat Time Warner Cable Arena in Charlotte, NC, just ahead of the Democratic National Convention in early September.

Taken together, all this activity looks like a pleasing vertical, and the earnings reports tend to confirm it. In its Q1 report, Charter Communications (NASDAQ:CHTR) posted better than 20% growth for its business services. In Q2, TWC posted 28.5%, and Comcast posted 34% business services growth.

Cable operators have good reason to be pleased with their forays into business services, and they can be expected to devote more attention to the space. It may not be glamorous, but it gets the job done.

Ron Hendrickson is BTR's managing editor. Reach him at [email protected].