Road Runner Business Is Also Rolling Along - Multichannel

Road Runner Business Is Also Rolling Along

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Time Warner Cable might be seeing exponential early adopter growth with its HDTV and digital video recorder services, but the MSO's commercial-services division isn't doing too badly, either.

Road Runner Business Class, as it is marketed, now serves more than 100,000 businesses and teleworkers with high-speed data services and, increasingly, phone and even video offerings.

What's more, the division's revenue growth is tracking more than 60% ahead of last year, when it rose more than 100% from 2001.

The company does not break out revenue figures. But if 100,000 customers pay an average of $100 a month (some more and some less, obviously), it would equate to $10 million a month, or $120 million a year.

So despite the economic downturn of the past two years, Time Warner's commercial division is flying high, and looking at new growth opportunities like larger enterprises and selling new services to existing customers.

While commercial services can often take a backseat to more pressing issues at many MSOs, the "corporate tent" at Time Warner is large enough for Road Runner Business Class to be more than welcome.

"The senior team has really embraced this, and that's the key to its success," said Time Warner Cable senior vice president of commercial services Ken Fitzpatrick. "You're seeing that in Cox and Charter, and you will see that in Comcast.

"You've got to look at growth and cash flow as a company. We add a lot to cash flow as other business are maturing."

Fitzpatrick sees plenty of growth opportunities left on the commercial side.

To start off, he said, "we're pretty low-penetrated, compared to the amount of businesses we pass," even with the company's huge double-digit growth rates. "We can expand the footprint with the products and services we know about today, that will keep us busy for awhile."

One step in that expansion is larger enterprises, typically the province of the Baby Bell telephone companies.

"We're looking at larger customer opportunities," Fitzpatrick said. "We have a lot of fiber in the streets. We've solidified back office, and have national billing systems that allow us flexibility for enterprise customers. We have a national, centralized customer care center."

One large customer is Duke University, which Time Warner wired with a 100-Megabyte connection to its residential plant. Time Warner serves 700 Duke University teleworkers, on-campus faculty and residential and off-campus students.

Convergys Corp.'s new ICOMS 5.1 billing product allows Time Warner Cable to bill all those users independently, based on their level of service and usage. "Some of it is bulked billed and some of it is individual billed," he said.

A typical large enterprise might pay $1,000 a month for a 1.54 Megabyte T1 line. "We can reduce that cost substantially and give them a two megabyte by two megabyte connection," he said.

With the somewhat rocky economy, Fitzpatrick said enterprises both large and small are looking to cut costs.

"In down times, people are looking at ways to reduce costs and consolidate initiatives," he said. "We're very cost-competitive.

"Security is a very large issue right now," he said. "Data backup is a piece of it, and firewalls are a key aspect to what people are looking for. We're also bundling additional services over the basic tiered access with things like management security and web hosting."

One new product Time Warner is offering is a PBX extension product. "We're using packet and softswitch technology to offer the at home worker seamless connectivity into their company's phone system," Fitzpatrick said.

Time Warner is partnering with an unnamed service bureau in some markets for the softswitch and media gateway features necessary to offer teleworkers that PBX extension product. It allows workers to use Time Warner's high speed platform for data, but connect to and use the PBX functionality of their company's own phone system.

That PBX extension product will be available in all markets by early next year, he said.

In addition to voice services, Fitzpatrick also is bundling video, such as adding Cable News Network to a conference room or The Weather Channel to a waiting room inside corporate offices.

Road Runner Business Class services runs on the much of the same network as Time Warner's video operation. At some points, however, technology is specific to one side the business or the other.

For instance, Fitzpatrick said that in many large Time Warner markets, one 6-Megahertz channel has been set aside for exclusive use by Road Runner Business Class services.

As Time Warner rolls out residential VoIP services, those initial soft switches and media gateways will be dedicated to the residential business, he said. But over time, it's possible some of that technology could be used on the business side as well, Fitzpatrick said.

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