Comcast Enhancing SMB Segment - Analyst Blog

By Zacks Equity Research,

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Comcast Corp. ( CMCSA ), the largest cable TV operator in the U.S., has decided to deploy SIP trunking to offer VoIP (voice-over IP) based services nationwide by the end of 2014.

The small and mid-sized business (SMB) segment has become a huge growth opportunity for the cable TV industry. Significant improvement in business data and video traffic is expected to act as a future growth catalyst for the industry.

Comcast is gradually shifting focus from the small-sized business segment to the mid-sized business segment. Offering VoIP service will help the company target large business establishments. Earlier, the company acquired privately held VoIP service provider New Global Telecom and privately held local exchange carrier Cimco Communications.

The advanced technologies of these companies coupled with Comcast's high-speed Internet and Ethernet networks will help the company offer industry leading VoIP service to large enterprises.

Major cable TV operators like Comcast and Time Warner Cable Inc. ( TWC ) are extensively exploring opportunities in this segment to counter competition from fiber-based video offerings by telecom giants Verizon Communications Inc. ( VZ ) and AT&T Inc. ( T ). Comcast currently has a Zacks Rank #2 (Buy).  

Currently, the market size of the U.S. Business Services segment is approximately $8 billion. Various industry researches estimate that the SMB segment will offer a market opportunity worth $20 billion to $30 billion. During the first nine months of 2013, Comcast and Time Warner Cable generated $2,365 million (up 26.8% year over year) and $1,696 million (22.4% year over year), respectively.

For full-year 2013, Comcast is expected to generate more than $3 billion revenues and Time Warner Cable is likely to generate nearly $2.5 billion revenues from Business Services segment.    

COMCAST CORP A (CMCSA): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

TIME WARNER CAB (TWC): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CMCSA , SMB , T , TWC , VZ

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