By
Martin Creaner
While enterprises spend billions of dollars every year on telecom services, a disproportionately small amount of this spending goes to cable operators. The MSOs (Multiple Systems Operators), however, are not accepting defeat on this potentially lucrative opportunity. Instead, they are increasingly focusing on the commercial enterprise and what they need to do to be competitive against the telcos that have been entrenched in this market for decades.
A recent In-Stat report on Enterprise Cable found that while worldwide cable telephony subscribers hit 30 million in 2007, up 7.5 million from 2006, the best of the leading MSOs in the U.S. had only a few hundred thousand business subscribers. And while cable numbers are estimated to grow by around 20 million per annum over the coming few years, the key question for MSO’s is whether they can increase the % of small and medium enterprises (SMEs) opting for cable voice and data.
MSOs may be facing an uphill battle when it comes to the enterprise. After all, the cable companies have a years-long reputation as primarily residential service providers, a perception that might be hard to overcome. Cable operators have to shift the enterprise mindset to one where the winning package of the price and the service reliability they require can be obtained through their local cable provider just as well as through their local telco.
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The cable companies have a years-long reputation as primarily residential service providers, a perception that might be hard to overcome. |
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Despite this, cable operators are having some success gaining business voice customers. The In-Stat report notes that MSO’s are adding a steady 15,000 to 20,000 new business subscribers each quarter. Of course 10 years ago, residential cable phone service was struggling to break into residential voice service – so we’ve been here before and we all know the results of that particular battle.
Challenges Ahead for Cable
Creating a shift in perception is key for cable companies to successfully infiltrate the
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It’s not clear what this winning formula is. Do they try to replicate their consumer offering to the cable market (i.e. bundled voice, data & video), or do they try to offer a standalone voice product? All options are potentially viable, but there is no certainty as to which will deliver the killer blow. As a result, the companies have been trying a variety of approaches.
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enterprise market. Not only do the MSOs have to look at what they need to do to make inroads into enterprises – particularly small and medium enterprises (SMEs) – but they also have to guard their backs as the telcos start to make a play for their traditional strong area: broadcast video.
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