Cox has been the most successful cable operator in capitalizing on the market in small and medium sized businesses (SMB) and commercial backhaul services, a potentially big growth area for cable, according to Sanford Bernstein senior analyst Craig Moffett.
In a report stemming in part from a meeting with Cox Business executives, analyst Craig Moffett said that the SMB market is a $50 billion-$70 billion opportunity, or about the same as the combined residential video and broadband market.
Cox has revenues on par with those of Comcast and Time Warner on a footpring only a fifth to a little over a third as large. Both Comcast and Time Warner are ramping up their SMB revs, Moffet wrote.
According to the report, about 11% of Cox's revenues comes from commercial services, with Cablevision next at about 10%. By contrast, only 5.9% of Time Warner's revenues come from business services, and only about 3.6% of Comcast's.
Cox's service is also more heavily in voice than video, with voice the biggest growth opportunity in the business sector.
But even though that growth market represents yet another blow to its telco competition and a hedge against declining rates for residential growth, Moffet wrote that Sanford Bernstein remains hesitant to recommend cable stocks based on the uncertaintly surrounding possible Title II reclassification of broadband service by the FCC.