Business unit of Comcast breaks $1B

Business unit of Comcast breaks $1B

Published in: Philadelphia Business Journal, November 19-25, 2010
By: Peter Key, Staff Writer

November 19-25, 2010 - Most of the competition between cable-television and phone companies has focused on residential customers. That is starting to change.

Comcast Business Services, which Comcast Corp. launched in 2006, is on pace to do $1.18 billion in revenue this year and the actual number could be higher. Not only has it racked up $902 million in revenue in the first three quarters, its revenue has risen in each quarter, from $263 million to $306 million to $333 million.

Those figures are likely to continue accelerating because of a shift in the unit’s focus. Until this year, it concentrated on businesses with one to 20 employees, largely because those were the types of businesses it had the products to serve. Now, it’s going after larger ones, too.

Comcast can do that because of the massive amount of fiber it has laid over the years to link the coaxial cable last-mile networks that bring its video, phone and Internet services to homes and businesses.

The fiber enables Comcast to offer Metro Ethernet technology, which allows all an organization’s branches in a metropolitan area to function as if they’re on one computer network and makes possible transport speeds of 100 megabits to 1 gigabit per second.

It provides “not just access to the Internet, but the movement of highly critical information between locations,” said Bill Stemper, the president of Comcast Business Services.

Comcast has Metro Ethernet technology available in the region and will be able to offer it to customers adjacent to its fiber in all areas of the country sometime next year.
Bill Stempers
  Bill Stemper, President, Comcast Business Services

Stemper estimates the larger businesses the company will be able to serve as a result of its network upgrades spend $10 billion to $12 billion a year on telecommunications and data services. Since he said the small businesses Comcast already has been able to serve spend about $12 billion to $15 billion a year on technology, that puts the size of the market his unit is going after at $22 billion to $27 billion a year.

“It certainly can be billions and billions of dollars,” he said. “If we’re at this stage starting with small businesses after three or four years, one can certainly imagine as we expand into larger customers, what this can be in 10 years.”

It’s a huge opportunity for all the cable companies. In a September report, Sanford C. Bernstein & Co. analyst Craig Moffett estimated that the small and medium business market reachable by every U.S. cable company is $50 billion to $70 billion, which equals the size of the companies’ residential video and Internet markets today.

Going after that size market requires people — Comcast Business Services has them and is adding more. The unit has about 1,200 people, 300 of whom are in its call centers, and the remainder of whom are “feet on the street,” Stemper said.

Comcast’s Eastern Division has opened an Enterprise Center for Business Services in a former call center in Horsham. The building has 70,000 square feet and houses about 325 people who work in customer and technical support, sales, training, human resources and administration, and plans to increase that number to 375 by the end of next year, including 140 it has hired recently or intends to hire.

Comcast Business Services didn’t have dedicated technicians when it was created, but Stemper said that has changed as the unit adds more customers that can’t afford interruptions to their data service.

“At the end of the day,” he said, “these businesses require a level of service and a level of response and a level of quality that keeps their business running top-notch.”

One such business is Univest Corp. of Pennsylvania, which has about 40 locations, including about 35 bank branches, all of which have to remain in touch with its operations center in Souderton.

Rick Boaman, Univest’s director of technology, early last year began using Comcast to provide backup services to the T1 lines the company got from Verizon Communications Inc. He has been so satisfied with Comcast that he switched to it as Univest’s main service provider and uses Verizon’s T1s for backup.

In addition to providing Univest with reliable service, the switch has allowed it to save money because it no longer has to pay toll charges on phone calls.

“When your local and long-distance calls are free, you roll that back into the pricing and it’s a no-brainer as long as the technology works,” Boaman said.

Reprinted for web use with permission from the Philadelphia Business Journal. ©2010, all rights reserved. Reprinted by Scoop ReprintSource 1-800-767-3263.

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