Comcast has Idea To Go After Small Business

Comcast's (CMCSA) stock has been hammered over the past year--down 20 percent. The company's facing new competition from telecom and satellite TV companies, a cratering home sales market, and bad news from its consumer business, which signs up--or upgrades--customers when they buy new homes. As part of CEO Brian Roberts' ongoing plan to turn around that stock, Comcast has a new strategy.

This month Comcast is set to unveil its new "Business Class" --a bundle of the broadband services targeting the six million small and medium sized U.S. businesses. Offering more bandwidth and better phone options, it's also partnering with Microsoft (MSFT) to offer a full small business package, including web-based software. (Web based means the small business owners don't need to buy additional storage).

Thinking small is a big change for Comcast. Right now this market generates only one percent of its revenue. And unlike the mature and increasingly competitive consumer market, this could be a fast-growing business for Comcast. The company aims for $2.5 billion in revenues from this new division by 2011, by offering more bandwidth for more affordable prices.

Telecom companies, like Verizon (VZ), already serve this small business market, as do Comcast's cable industry competitors. Cox (CXR), which has been in the business for fifteen years, has the biggest base: ten to fifteen percent of its revenues (the company is private) come from these commercial services.

Cox tells me they're not worried about Comcast entering the field, there's plenty of room to grow. This business has the potential to be really profitable for both companies. One benefit of serving businesses: companies can leverage their existing residential networks when people are off at work and school, squeezing more profit from the companies' existing infrastructure.

Comments

[your dad:]

Verizon sucks so bad. Overpriced unreliable service. I miss Cox.

2008 Mar 07 10:10 AM

[choup:]

Hopefully Comcast will do a better job than I've been experiencing first hand. They are not responsive. Not customer friendly. Have way too many outages caused by network upgrades or weather...

2008 Mar 10 11:55 AM

[sundance:]

Comcast recently took over for Insight in our area of Indiana. We have wireless internet. Comcast "forgot" to tell it's new customers that they "do not support wireless". If you work from home or do on-line classes, this really sucks!!!!....especiall... when we didn't have a choice of the "take-over". We are in an area where Comcast is a monopoly.
Can't see where they'd do any better in small or large businesses without wireless capabilities, since so many companies have people who do work from home or off-site.

2008 Mar 10 03:38 PM

[scratchy:]

I had to look at this story's dateline to see if is was 1998, not 2008. Cox Business Services (and other Cable systems) have been selling into small/medium (and enterprise too) for at least the last 11 years. And kicking the incumbent's butt in every local market, taking 36-60 month contracts for both tariffed and non-tariffed voice (dialtone) and internet (cable modem) service @ business rates, not the lower residential rates. And when you look at customer satisfaction level, theirs are far higher then the LEC. Comcast _must _ fix their customer service formula before they successfully penetrate those local markets.

2008 Mar 10 10:37 PM

[User 162736:]

I can see this is a way for businesses to save money, but will they be giving up on service? What happens to the service when kids are let out of school? Will the voice calls be lost in the shuffle with kids getting on the internet. This has been a problem since 1970's when kids got out of school, and the network (local dial tone service) would not place calls that were in a speed dialer. What is going to happen to the digital network at that time of day?

This is something that need to be considered. As it is now the internet slows to a crawl around 3:30 PM when the schools let out, until late in the evening.

2008 Mar 11 12:37 PM

[Paratracker:]

What does the rate plan look like? Scaled by number of employees?

2008 Nov 09 04:08 AM