Credit: Shutterstock photoComcast CorpCMCSA) has acquired Contingent Network Services, a Cincinnati based technology deployment and managed services company, for an undisclosed amount. Earlier, Comcast had announced the creation of a new 'Enterprise Service' division with an aim to provide managed business services that include broadband, ethernet, voice, router, security, business continuity and Wi-Fi for Fortune 1000 companies. The acquisition will help Comcast to provide the necessary framework required for its new division. The firm will operate as a subsidiary of Comcast.
Gearing up for the Big Battle
Comcast is already an established player in the Small and Medium Business (SMB) segment. By foraying into the Large Business Segment, the company will face direct competition from established telecom players like Verizon VZ and AT&T T . Unsurprisingly, the company was in search for more firepower.
With the acquisition of Contingent, the company hopes to get enough ammunition to challenge the likes of Verizon and AT&T. Large companies require a provider to manage complex networks, develop business continuity plans and integrate cloud-based applications with business operations.
With the introduction of the new division, Comcast will try to provide necessary innovation and choice for these large customers. Contingent will assist the new unit to deploy technology at its client sites by taking advantage of Comcast's extensive fiber and hybrid fiber-coax layout so as to deliver a seamless network experience to end users. The company has also entered into agreements with other cable operators to support the process.
Comcast stated that it has already won several large customers from multiple industries including financial services, hospitality and retail chains.
To Conclude
Cable industry players face significant threats from new age video streaming services like Hulu and Netflix NFLX . Comcast is no exception. To maintain its financial position, the company is focusing on the business services division, which diversifies its business operations and creates a stable revenue stream. It is one of the fastest growing divisions of Comcast and clocked a growth rate of 21% last quarter. It remains to be seen whether its efforts to serve large businesses can create value in the long run.
Other stocks to Consider
Comcast Corp currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is CABLE ONE INC. CABO which carries a Zacks Rank #1 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AT&T INC (T): Free Stock Analysis Report
NETFLIX INC (NFLX): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
CABLE ONE INC (CABO): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
