Comcast targets big business
Talk about clash of the titans. The nation’s largest cable TV provider is going head-to-head with the nation’s two biggest phone companies, competing for the biggest of the big business customers.
Comcast announced Wednesday a new Enterprise Services unit that is aimed at offering internet, phone and other communications products to Fortune 1000 companies.
These kinds of offerings have been the purview of AT&T and Verizon because they have nationwide communications infrastructure in place, which can serve corporations with offices in multiple cities. While Comcast covers more than half the cable markets in the country, it still has geographic limitations, just like all other cable providers.
But in announcing its latest move, Comcast said that it’s struck deals with other cable operators to cover a broader swath of the country, and that it has already signed up “large customers from multiple industries, including financial services firms, banks, hospitality chains and retailers.”
Craig Moffett, senior research analyst at MoffettNathanson, says that is something cable companies have wanted to do for years. “It’s always been the dream of the cable industry to say, ‘let’s do a nationwide consortium.'”
In the past, that dream has not withstood the daylight of reality, says Thomas Eagan, senior research analyst at Telsey Advisory Group. Cable companies have tried similar partnerships when first selling broadband and another in a deal with Sprint, Eagan says.
“We haven’t seen these cable consortia be that successful,” he says. “What we found is that the cable operators’ individual agendas were sometimes at conflict.”
While the prospect of this latest partnership remains an open question, the potential for revenue does not. Providing broadband and communications services to business customers is a much higher margin business than selling cable TV plans, because the former doesn’t require expensive deals with content providers, Eagan says.
Comcast has already been offering services to smaller businesses, ones within its geographic service areas. The company says that part of its business is among its fastest growing and could bring in as much as $4.5 billion.
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