Business: Cable’s 'Sweet Spot’

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There is widespread agreement that there is a tremendous opportunity in the commercial segment for cable companies, and the time has come to underscore cable’s commitment to growing this segment of the business.

As MSO executives charged with increasing market share and profits in commercial accounts, and as co-chairs of next week’s Cable & Telecommunications Association for Marketing Commercial Services Forum, we thought we would take a moment to provide our insights on the state of this vibrant, reliable and fast-growing business.

It’s still thought to be early in the life cycle of cable commercial services — the business-to-business divisions of MSOs that provide multiple broadband communications services — but the industry is proving that we are viable providers to these customers and that we can make money doing it.

MSOs are pushing harder with new technologies, services and more salespeople while investing to build back-office tools to go to market in an efficient manner.

THE OPPORTUNITIES

Cable companies are realizing the natural extension of their core competencies is to take advantage of the new growth opportunity and combat competition.

There was a time when only small groups inside MSOs appreciated the commercial-services opportunity, but now that recognition extends out into our field organizations and throughout much of the cable industry. It’s time to acknowledge, too, that we have some work to do to fully increase and maximize cable’s commercial revenue.

Beyond the acceptance we’ve been building up inside the business, there’s a growing visibility within the marketplace about what cable companies can do, including the ability to aggressively compete against T1 and multiple T1 services. Now, we need to raise our visibility with business customers, so that cable is the top-of-mind service provider.

Through more aggressive marketing, we can get ourselves out in front and let customers know that cable is ready to meet their business needs.

Cable’s localism appeals to small and midsized businesses that are underserved by competitors, as well as to the local needs of large and national customers. While some systems have been providing voice service to small and medium companies for years, companies such as Comcast Corp. and Cox Communications Inc. are also starting to get traction in serving large enterprise customers, their branch offices and their growing groups of teleworkers.

Also, local municipal and government facilities, hospitality facilities, educational institutions and healthcare and financial services outfits tend to be located within an MSO franchise where cable can serve the needs across all of the customer’s locations. Essentially, customers want proven commercial providers who aggressively develop and support the business services they need and who creatively drive products to this space such as Web hosting, managed security, virtual private network capability, remote access solutions, domain name and other services.

THE CHALLENGES

On the flip side, competition to cable comes from the local exchange carriers and competitive local exchange carriers. Despite the fallout of the telecom bust of the late 90s, business customers want alternatives to LECs. Contrary to many of the CLECs of the 90s, cable’s commitment, financial strength and proven track record make it a very viable alternative for small, medium and large business customers. The MSOs have invested $95 billion to build an advanced hybrid fiber infrastructure powerhouse capable of delivering advanced voice, broadband/fiber and video services to businesses. Combined with a long standing history — a commitment — in the communities it serves, these strengths place cable in a stronger position than the CLECs (competitive local-exchange carriers) and provide the “secret sauce” that differentiates the cable product as a community resource.

So far, from a business perspective, the telcos’ focus has primarily been centered on the large enterprise customer and serving their national and global needs. Cable’s specialty in serving large customers in most cases has been by serving their local or regional needs.

Since the business community will always be seeking a dependable number of multiple providers, cable operators are well-positioned as strong, financially healthy companies that can provide a level of quality that allows them to successfully fulfill clients’ business requirements.

To that end, the challenge for cable in selling commercial services is to ensure we have the infrastructure in place to support commercial customers in the way they demand to be supported, both technically and from a sales-and-service perspective. If a customer buys data service or voice services from the cable company, then we become mission critical for that customer, and we need to fully satisfy the customer in terms of service level agreements and performance levels.

A BRIGHT FUTURE

Cable commercial services have a promising future, and it’s our responsibility as an industry to drive visibility and understanding deeper into our companies and within the industry about what we can accomplish.

Everyone is focused on how to grow the cable business. This is a tremendous way to start driving additional return on the investment we’ve all made in network upgrades and asset deployment.

Compared to five years ago, the capabilities of our networks today are unbelievable, and cable’s strong portfolio of services suit the needs of commercial customers today and continue to advance to bring greater efficiencies in years to come.

Significant growth and improvement in this area has been realized through CTAM’s Commercial Services Council and the events and tools — such as the best practices, electronic newsletter, Web site and Webcasts — that have been created by this group. The Council and its efforts have been further enhanced by inviting key suppliers to join this industry body. It benefits the cable industry overall when suppliers better understand cable’s commercial strategy so they can more effectively deliver solutions that will ensure commercial success.

At this year’s CTAM Commercial Services Forum on May 19, we’re focusing on things corporate and field executives can do now, i.e., pinpointing the appropriate product offerings, taking the necessary operational steps to make it actually happen and sharing insights on how to go to market.

In this full-day educational program, attendees will be presented with a 360-degree perspective of the product portfolio, and will hear from both cable customers and those involved in effectively building this business. The forum will stretch and challenge industry minds so they can go back to their companies and go to market in more effective ways.

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