The next billion-dollar-per-year opportunity for Cablevision Systems Corp. could be providing voice and data communications to businesses.
Chief operating officer Tom Rutledge said Thursday that Cablevision has begun to make a strong push for business from businesses, even though “it's a fairly immaterial piece of revenue today.”
He added that the amount of money being spent by businesses within Cablevision's operating territories is about $5.5 billion per year. If the MSO could pick off 20% of the commercial market on its turf, that would be an additional $1 billion in revenue for what is currently a $4 billion-per-year cable-television and telecommunications business, he added.
“It's a huge opportunity,” Rutledge said. Cablevision has, he added, “aggressively moved into that space, and I think the rest of the industry will follow.”
Kagan Research LLC estimated that the cable industry as a whole only pulled in $1.2 billion in revenue from business customers in 2004. But it projected that figure to reach $10.7 billion by 2009.
For Cablevision, the 20% share is not a far-fetched objective. As of the end of December, 16.3% of homes Cablevision passed subscribed to its “Optimum Voice” service, the company reported last Monday.
Cablevision recently began trying to sign up small-business customers in Connecticut with a program called “Optimum Online Boost,” which combines the ability to download at speeds of 30 megabits per second with Web-hosting services.
The MSO also now offers small and midsized businesses in all of its service areas four-line telephone service.
For years, the company has offered businesses secure communications in the New York metropolitan area in a set of services it calls Optimum Lightpath.