U.S. cable companies historically have focused on serving up lots of TV fare and other communications services for home consumption, but within the next five years, they will generate annual revenue of nearly $16 billion by serving businesses, according to a new forecast from Pike & Fischer.
The bulk of that revenue will be going to the nation’s three top cable operators — Comcast, Time Warner Cable and Cox Communications, according to the study. But smaller cable companies also will generate increasing amounts of revenue from business customers, the market research provider concludes.
Today, cable commercial services revenue makes up approximately 4 percent of total cable revenue in the United States as of 2008. By 2013, that should rise to about 10 percent of total cable revenue, the research firm projects.
“The growth rates for residential services are starting to level off. As a result, commercial services, especially those delivered to small- and medium-sized enterprises, are an even more critical imperative for cable operators,” said Tim McElgunn, chief analyst for Pike & Fisher’s Broadband Advisory Services and author of the report. “The revenue and margins delivered by these services will be the main growth engine for the industry over the next few years.”
While some larger cable companies have developed sophisticated data service offerings aimed at larger enterprises, most cable companies are finding success delivering basic services such as broadband data and voice plans to small and medium companies, McElgunn said.
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