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 Channel Futures

Best Practices


Shutterstock

2020 Growth

2020 Forecast: Where Will Cable’s Growth Come From?

Revenue from business services continues to grow for cable providers.

… 5% of the $40 billion worldwide revenue for managed SD-WAN, MPLS, and site-to-site VPNs, according to Erin Dunne, director of research services, Vertical Systems Group. Many businesses are clinging to their MPLS services, although reliance on T1/T2 lines is dropping off and is ripe for conversion, she said.

VSG's Erin Dunne

VSG’s Erin Dunne

Similarly, cable’s plans for more managed security services have met resistance from companies that want to use their own security provider or are concerned about how cable will provide such services, be it on-prem, in the cloud or elsewhere. “We’ve taken our lumps,” one provider acknowledged.

Despite the flattening of growth rates, researcher Greg McNiff, a cable services analyst for Nomura Instinet, said cable’s relationships with SMBs remain strong and provide opportunities to increase ARPU (average revenue per unit). For the medium-sized business sector, McNiff projects cable annual revenue to rise from $2.4 billion in 2019 to $3 billion in 2023, with penetration increasing from 26% to 30%. Similarly, cable’s penetration of enterprises will increase from 11% today to 15% in 2023 with annual revenue rising from $3 billion to $4 billion in that timeframe, he predicted.

Cable foresees new opportunities in key verticals that have been foundations for growth, especially government, education (K-12), health care and hospitality. Based upon research presented by David Strauss, principal, Broadband Success Partners, customers in those verticals are looking for solutions, not just products, and they value cost-effective broadband with reliable capabilities for WANs and cloud-based services.

Strauss said cable providers are exploring new verticals, including: agribusiness for farming; e-gaming for higher education; energy and utility management; and automation support for manufacturing. Most of these opportunities will arise depending on the types of institutions in a provider’s geographic area, he noted.

For the long haul, some observers believe cable must add a mobile play to its business arsenal. Comcast and Charter offer residential mobile service in MVNO (mobile virtual network operator) agreements with Verizon and Altice USA with T-Mobile Sprint. McNiff said he expects cable providers to pursue owners’ economics in the form of either a large acquisition or merger, or a network consisting of CBRS (citizens broadband radio service), small cells and Wi-Fi.

As capacity and capabilities grow, cable will keep moving toward the hallowed world of virtualization, but it is staying grounded in its roots.

Spectrum’s Parimi said: “We will for an extended period of time be in a hybrid scenario where we have some virtualized services but also device-based services. We have to learn to operate in both worlds. So it’s a learning curve for everybody.”

Quick Bits

  • Spectrum Business National Accounts has introduced Spectrum Total Connect, a new service that delivers internet to all of a business customer’s locations nationwide, even those locations that are not traditionally supported by Spectrum. By leveraging agreements with other providers, Spectrum is offering businesses to connect multiple locations served by a single provider. Included are a variety of internet plans, including Spectrum Business Internet Gig (speeds up to 940 Mbps) and online management tools to help businesses monitor orders, support requests and more.
  • Comcast has completed its acquisition of Blueface, a Dublin, Ireland-based technology provider, to support Comcast Business’s unified communications as a service (UCaaS). Comcast said the acquisition adds Blueface’s proprietary and customizable cloud voice UC platform to Comcast Business’s portfolio of solutions, including audio and video tools to connect employees across devices and locations.
  • Cox Business released the results of a Pulse on Healthcare survey tracking people’s interest in digital health care and telehealth, which Cox Business supports. Based on the survey, Cox said almost three-quarters of patients would have greater peace of mind if their primary care physician put aside pen and paper for electronic health records (EHR) to chart progress during visits. Forty percent of those surveyed use wearables such as a Fitbit or Apple Watch to track their health goals and 83% of them are willing to provide their primary physician access to their fitness-tracking data. Yet 56% of survey respondents report that their primary doctor doesn’t offer telehealth services.

Craig Leddy is a veteran cable industry writer, speaker and market analyst, and a contributing analyst for Light Reading and Heavy Reading, which are Informa properties. Leddy founded Interactive TV Works, a media consultancy, to promote understanding of advanced digital services. He is a former editor of Cablevision magazine, senior analyst for The Myers Group and contributing editor for Multichannel News. He teaches the popular How Cable Works industry courses that include CTAM’s Advance Executive Education. He also founded and hosts the Interactive Case Competition, a leading case study contest for business students. Follow him on LinkedIn or Twitter.

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