Comcast Climbs Up a Rung on the Business Ladder

September 16th, 2015 by · 10 Comments

Today Comcast Business has revealed plans for a new Enterprise Services unit that will target larger enterprises with more complex infrastructure needs than Comcast Business has targeted in the past.

For several years now, it has been one of the questions people ask about cable operators. Given all their success at the smaller end of the business markets, will cable operators make a move on larger enterprise opportunities? Given their regional franchise-based footprints, can they operate effectively for deals at the national level? Are their product portfolios ready to to head to head with the battle tested versions offered by national telecoms, whether it is the incumbents at AT&T, Verizon, and CenturyLink or their nextgen challengers at Level 3, Zayo, etc?

the_comcast_networkComcast operates a substantial national network of course, with some 141,000 route miles of fiber and another half million or so when you include legacy coax and such.  The intercity footprint is built off of dark fiber IRUs, for the most part.  But at the metro level, their footprint is their own build and coverage is either very deep or non-existent, depending on whether they have historical cable franchises in the area.

Comcast plans to get past the regional limitations through wholesale relationships with is cable brethren. They may not have a New York City footprint, but TWCBC and Cablevision’s Lightpath division do, for instance. And to manage such wholesale relationships, Comcast apparently purchased a company called Contingent Network Services a few weeks back.  What happens when Cox or TW Cable decides to similarly go national is an interesting question, as those relationships start to get pretty complex.

Cable operators have found significant growth opportunities in the business markets over the past 5 years. Through both HFC and pure fiber deployments, many have been growing those revenues at a clip greater than 20%, despite the fact that the dollars involved are no longer small by any measure. Comcast’s Business Services division turned over $4B last year.

But are they nimble enough to move up a few rungs on the ladder already? It’s one thing to provide metro ethernet and maybe a little hosted voice to an SMB at one location. It’s quite another to put together a multi-state managed WAN that supports a hybrid cloud infrastructure and spans multiple providers with different back-office systems and vendor gear, even with the help of Carrier Ethernet standards and all that.

They have a couple advantages though. The first is that the likes of Verizon and AT&T may have the reach and the resources, but they are rather more interested in the wireless world and have been on defense in this sector for a long time. And the second is that unlike the Level 3s and Zayos of the competitive world, the cable MSO world already goes almost everywhere at least with coax. If they can work together, they start with fewer off-net or build-out needs for more opportunities.  In theory anyway.

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Categories: Cable · Metro fiber

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10 Comments So Far

  • Kahlil says:

    I don’t think them showing up to an Enterprise strategy late to the game is a bad thing, necessarily. Frankly, the portfolio of all these other national carriers has been stymied by constant corporate roadblocks, very minimal returns and constant cutting measures, old school thought process on how to market, and other items.

    If Comcast can get past that, they can make a service library from scratch that avoids all the silly things the grandfather companies have locked themselves into. And they are probably best positioned to do so on a national (or larger) scale, fast.

  • Guest Ann says:

    Do I sense a Comcast buying out Level 3?

  • davidrohde says:

    They may have to buy a Level 3 if they think that the entire game here is being able to bid out an entire national enterprise location set (which is great) but then operationally each underlying cableco is blamed for any local problems with no effective central network management. I suspect in their minds Comcast figures this sets them up for national enterprise wireline and their next move is to buy T-Mobile or Sprint to complete the wireless+wireline enterprise competition with Verizon and AT&T.

    In a way those eventual acquisitions might be good for enterprises (after the usual initial merger horror show) because 1) T-Mobile for all its recent success is still close to meaningless in enterprise bids despite SMB packages like “Uncarrier 9.0” and 2) Sprint at this point is an almost completely useless appendage and needs to be put out of its independent misery – enterprises rightly have no forward confidence in it at all.

    Eyes on this going forward and I have to say, congrats to the FCC for recognizing in the Comcast/TWCable denial that it’s not the roll-up of assets that matters, it’s the MOTIVATION to serve a market – in this case enterprise because they were blocked from going further in consumer – that creates change.

    • Kahlil says:

      They may have to, but it would certainly ruin their chances at starting the concept of enterprise networking from scratch. Level 3 is the quintessential boring and legacy network bolted together with duct tape and rubber bands.

    • Anonymous says:

      This strategy was well under way when FCC put the kaibosh on CMCSA-TWC. To spin it as a consequence of that decision is revisionist at best.

      Read any of Comcast’s statements on the doomed merger. Enterprise reach consistently was cited as a market benefit.

      • davidrohde says:

        I hear you, Anonymous, but statements and disclosures are not the same thing as competitive force. We here in the enterprise market (I’m a consultant exclusively on the side of enterprise customers, not carriers) are constantly fending off half-measures from would-be competitors, large and small, who haven’t realized all it takes to win versus AT&T and Verizon. On my blog I’ve published our take on Comcast’s enterprise launch and what needs to happen next for them to make a go of it. Nothing would be better than for Comcast (from the giant supplier side) and Level 3 (as a smaller competitor that has – finally – organized itself for the enterprise market) to act independently to provide robust 4-way wireline WAN competition with T & VZ for actual Fortune 500 businesses.

  • TelecomRep says:

    I’ve seen enough CLEC’s and even Level 3 flounder and fail initially at implementing enterprise product sets until they gobbled up TW (who in my opinion had a successful marketing plan for enterprise customers). These products are far more complicated than hooking up an undedicated internet circuit. The marketing strategy is completely different and sales cycles are lengthy and require a lot of consulting, especially if you’re setting up a WAN (MPLS or private line products). Of course, the more you broaden your portfolio of products, you can become unfocused on the parts of the business that do work for you and pay the bills. Wireless is where the growth is at right now, not wireline. Verizon would tell you (if they knew they wouldn’t piss their shareholders off) they want out of the wireline business. They’d probably just keep the backhaul lines and sell the rest of the assets (well they are doing this bit by bit, then re-investing in marketing (mobile advertising) and wireless network builds…).

    Furthermore, yes, AT&T and Verizon have a good chunk of the enterprise market share. But these companies really are not loved by their customers and the installs become pretty difficult at times. Have fun with that too Comcast.

    It will be interesting to see how this pans out. It’s no small nut to crack. But somebody has to do it.

    • Odd says:

      Verizon’s biggest issue is terrible customer support. Comcast Business will have to show customers that they can basically be the opposite of their retail line. I can see them capturing SME business, but not enterprise business.

  • Enterprize Customer says:

    I work for a global bank and buy enterprise and wholesale services from every provider on the planet. We do use Comcast, but only non- mission critical services. Comcast usually gets internet offload type services. I am also a residential cable modem customer and can attest their customer service is absolutely terrible. I can assure you that Comcast would have to greatly improve and establish an extensive track record with longevity that shows they could support our mission critical requirements. They are not there or even close to being there. They need to understand there are much greater requirements to establish business in the enterprise market. We require our providers to provide fiber route maps down to which side of the street the fiber transverses and whether it is aerial or underground for our IRU leases. There is an opportunity for them to establish more ground if they work smart. We are seeing AT&T and Verizon starting to no bid some type of services or bidding with a substitute services that will not work in our environment. I would always like to have another entity to provide a bid that I could leverage for better cost savings against the Telcos. Good Luck Comcast.

    • Enterprize Customer says:

      Updated, Bought a new house and had my Cable Modem moved from Comcast to the new address. Installer disconnected my sons Direct TV connection and installs the cable modem on its RG-6 cable and puts it behind his TV. I also have conduit previously installed from house to pedestal and it is sticking out of ground 1′ from pedestal. The installer runs it on top of the ground from pedestal to house and tells my wife ” he will be back to bury”. I couldn’t be home for the install. I left detailed instructions on what I wanted done because my wife was home for the install, completely ignored my note By the way when I returned home from my business trip I completely reinstalled the service how I wanted it done. I wasn’t going to wait a week for them to come back out. I am getting calls from Comcast sales people about seeing if they can help the bank with our “Enterprise Services”. No thank you I have seen your work.

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