Cable operator branches out with business bundles

While some cable TV companies have only turned their attention to business voice services in the last several years, Cablevision has been trailblazing with business bundles for 20 years. The company operates in the greater New York City metro area, and it has had some remarkable success in a hyper-competitive market.

While some cable TV companies have only turned their attention to business voice services in the last several years, Cablevision, through its Ethernet-based business services division Optimum Lightpath, has been trailblazing with business bundles for 20 years. (Cablevision addresses the SMB market with its Optimum Business offering, and the medium and large markets via Optimum Lightpath.) The company operates in the greater New York City metro area, and it has had some remarkable success in a hyper-competitive market.

One popular Optimum Lightpath bundle is a data plus voice offer that provides a full duplex Contracted Internet Bandwidth (CIR) in increments starting at 5Mbps up to 300Mbps along with a hosted voice service; prices for the business double play start at about $35 a month per user. The hosted service includes options for Cisco IP phones and LAN equipment.

Unlike most other cable operators that are still grappling with how to offer multi-line VoIP, Cablevision, through Optimum Lightpath, already offers a premise-based unified communications solution based on the Cisco Unified Communications Manager platform. Prices for the managed UC offer start at $45 to $50 a month per user, including both the voice and data service; prices vary according to the variety of applications supported.

Part of the company’s success stems from its deployment of a fiber-based network and the Optimum Lightpath network currently has 3,900 route miles of fiber and 3,800 lit buildings. In 2009 alone, Optimum Lightpath increased its lit buildings by 25%. In areas where the company has targeted specific vertical industries, it has enjoyed remarkable market share; for example, 70% of hospitals in the New York metro area are Optimum Lightpath customers and 98% of hospitals on Long Island (where the company is based) are Optimum Lightpath customers.

Finally, in addition to advanced services and very aggressive prices, Optimum Lightpath’s success has another differentiator: it has received the New York Public Service Commission commendation for excellent service 12 years in a row.

Our observation: While not every cable operator has the advantage of Optimum Lightpath’s dense footprint and few have the relative coverage of its embedded fiber-based connectivity, other cable operators who seek to grow their business service customer base can learn from Optimum Lightpath’s success with business bundles, niche marketing and solid customer service. And if other cable companies follow in Cablevision’s footsteps, traditional telco competitors can also look forward to increasingly serious competition for business services.