US Cable MSOs face big challenges in business services market says Insight Research

Many U.S. cable MSOs have looked to business services as a way to grow their revenue streams. But these efforts won’t face significant challenges, according to a new report from Insight Research Corp. In fact, the report predicts that cable MSOs will remain small players in an industry that, while large, features low margins and little cash flow.

Many U.S. cable MSOs have looked to business services as a way to grow their revenue streams. But these efforts won’t face significant challenges, according to a new report from Insight Research Corp. In fact, the report predicts that cable MSOs will remain small players in an industry that, while large, features low margins and little cash flow.

Insight Research makes this assertion in "Cable TV Enterprise Services, 2012-2017," despite the fact that the market research firm predicts U.S. cable MSOs will see more than $7 billion in revenues this year from business customers. That figure is more a reflection on the size of the market – it’s the second largest in the overall U.S. telecom services space, behind wireless, according to Insight Research – rather than any great success in stealing customers from entrenched, deep-pocketed telecom services providers.

"While their legacy in providing services to residential segments may give them confidence they can grow profitably in this adjacent segment, the cable operator's challenges will be steep and growth is dependent upon taking market share from entrenched players," says Fran Caulfield, research director at Insight Research. "Our study concludes that despite these obstacles, cable operators will forge ahead and the entrenched telco providers will likely respond with investments, price, and improved performance to combat this threat. It should be an interesting few years."

"Cable TV Enterprise Services, 2012-2017" segments revenue estimates for telco and cable operators providing basic voice, data, and video services offered to the small, medium, and large enterprise business segments. The report also provides revenue estimates for a range of business services, including Ethernet, private lines, voice services, web hosting, optical transport, and video.

The 137-page report is available immediately in electronic (PDF) format and can be ordered online for $4,695.

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