Comcast Emphasizing SMB Segment - Analyst Blog

Comcast Corp. ( CMCSA ), the largest cable MSO in the U.S., is aggressively exploiting small and mid-sized ( SMB ) business opportunities. The company is currently providing metro Ethernet services in 20 major U.S. markets and is expected to offer the services in most of its point-of-presences by the end of 2011.

The U.S. telecom giants are gradually expanding their fiber-optic pay-TV services. Verizon Communications Inc. ( VZ ) with FiOS network and AT&T Inc. ( T ) with U-Verse network have transformed the entertainment, information, and communications market into a highly competitive one. To counter competition, Comcast has decided to target the SMB segment, so far a core market of telecom service providers.

Using its vast network of fiber optic, the metro Ethernet service of Comcast offers faster and cheaper Internet access to business enterprises than the traditional T1, ATM, and Frame Relay services offered by the telecom operators. Comcast has launched four types of metro Ethernet services (1) point-to-point Ethernet Private Line (2) point-to-multipoint Ethernet Virtual Private Line (3) multipoint-to-multipoint Ethernet Network Service (4) Ethernet Dedicated Internet Access.

The SMB segment has become a huge growth opportunity for the cable TV industry. Significant growth of business data and video traffic resulted in an unexpected future growth catalyst. Both Comcast and Time Warner Cable Inc. ( TWC ) are expecting more than $20 billion business opportunity from the SMB segment. Several analysts estimated that revenue from SMB segment may reach $1.9 billion in 2011 for Comcast and this figure may go up to $2.5 billion in 2012.

In addition to metro Ethernet, managing wireless backhaul traffic for the mobile towers also opened up a multi-billion dollar market. Cable operators are now gradually offering innovative wireless broadband services to their business customers in order to keep this momentum going. Revenue from this segment may cross $500 million in 2011 for the cable TV industry.

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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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.

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