Cable companies going after SMBs

* Small midsize businesses are latest targets for cable companies

For readers who think the cable companies are content with offering triple play services to consumers, think again. Both Time Warner and Comcast have declared their intention to aggressively fight the phone companies for market share in the SMB market. Last week, Insight Research published a report that shows how the top 20 cable companies are expected to “grab a slice of the lucrative small business phone market, a move that could cost incumbent phone companies more than $4 billion over the next five years.”

According to Insight Research, “Incumbent phone companies are expected to lose more than 1.5 million small business phone lines to cable competitors by the close of 2007 alone, and nearly 10 million small business phone lines over the next five years.”

And, according to the report, it isn’t just voice line but profitability that the cable companies are going after because on a per SMB customer basis, “the revenue associated with providing a small business with data and voice services can generate three to four times the revenue of the residential customer buying a bundle of voice, data, and video services, which makes the competition for these customers all the more turbulent.”

Robert Rosenberg, president of Insight, notes that the research is based on the 20 largest cable operators that are able to reach about 6.5 million of the more than seven million SMBs in the United States. “[Multi-System Operators] such as Comcast, Cox, and CableVision have the offers and the reach, and they are going to have a definitive impact on phone companies’ bottom line over the next few years,” Rosenberg concludes.

A free report excerpt, table of contents, and ordering information is available online.

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