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A fervent believer in the promise of human powered growth, Russ leads CMG in partnering with companies to help them become aligned, agile, customer-driven enterprises that unleash the potential of their organizations with sustainable improvements in focus, teams, culture, and process our clients.
Mark leads CMG in partnering with Telecom companies to help them increase customers and accelerate revenue. His 25+ years of experience in growth, strategy and execution includes B2C and B2B multi-channel acquisition programs, customer experiences that surprise and delight, pricing that optimizes customer value, and innovative product development.
Business Services are a core source of growth for the Cable Industry, displaying strong fundamentals and a similar customer and rate growth pattern driven by the market’s ever-present appetite for internet bandwidth. Other new Business Services include prepaid service models to business-focused solutions, private networks, SMB enhanced services, SD-WAN, Cloud Services, and more.
Cable companies have long aspired to move up market in the business segment, expanding from their core Small and Medium Business (SMB) customers to larger businesses in the mid-market and enterprise segments. The products with the most promise in these segments, the Internet of Things (IOT) and private networks, offer potential paths to winning market wallet share.
Several enterprise and government verticals find private networks attractive, including mission critical industries such as commercial transportation, utilities, and public safety. In addition, retail, manufacturing, real estate, and education, among others, represent similarly valuable private network use cases. The U.S. private networks market is expected to surpass $20B in 2030 (Figure 1). Today, there is no scalable, cost-effective model to achieve these use cases, given wireless carriers’ reluctance to provide real solutions using their networks.
Cable operators, however, possess the right combination of both capabilities and assets. Along with extensive fiber and coaxial networks, many operators also have access to wireless spectrum, either licensed or via CBRS Priority Access Licenses (PAL). Combining these assets with their networking deployment and service expertise may allow cable operators to win an outsized share of new private networks. As Figure 1 shows, demand is building, and some cable operators are already assessing potential private network market entry points today.
Many cable operators have launched a business app portal to enable their SMB customers to shop, compare, and purchase applications. Such applications can range from Microsoft 365 to Google Suite to an operator’s own communications apps. As more SMBs transition to the cloud, they need the tools to activate their employees’ cloud journeys and experiences. Having a trusted communications tools & infrastructure advisor curate, offer, and even integrate business apps can create a more satisfied and stickier customer.
SMBs face marketing challenges, especially as customer engagement continues its digital evolution away from traditional print, radio, TV, and out of home (OOH). Managing website design, paid and organic search, social media channels, email marketing, Customer Relationship Management systems (CRMs), and re-targeting campaigns can quickly overwhelm business owners wearing multiple hats, including trying to balance their efforts between sales, marketing, and operations. Of the agencies specializing in SMB marketing (full service and advisement), few have the scale and relationships that most cable operators enjoy with the SMB segment.
In addition to those relationships, cable operators can leverage their advertising expertise to provide customers with consultative and traditional agency services. Cable operators receive some portion of advertising minutes as part of their programming purchase, and their resale of this ad time to SMBs amounts to a sizable business (Comcast’s ad business was $2.8 billion in 2021 4.4% of total revenue). However, with the decline of linear TV, those TV-based ad businesses also need to evolve, and a shift to digital marketing models would fulfill customer demand for those assets while creating a new, value-added agency service as an additional revenue source.
Network virtualization and deployments of Software-Defined Networks (SD-WAN) provide the dual benefits of operations and capital efficiency for operators and activation of new use cases for business customers. Customers can experience real value with SD-WAN, either via replacing Multiprotocol Label Switching (MPLS) or by leveraging a hybrid model to deploy new or remote office locations. In either case, customers would enjoy lower costs, faster deployments, flexible traffic routing, and enhanced security.
AT&T has deployed 40,000 – 50,000 universal Customer Premise Equipment (CPE) units with its business customers as an example of cost reduction through retirement and consolidation of customer premise appliances. AT&T’s universal CPE enables “applications” like a virtual router, firewall, and accelerator to sit on a single piece of equipment. These applications can then be updated with software releases delivered over the network.
As another example of enterprise enablement, AT&T has deployed 140,000 remote access kits to allow remote employees to connect to their enterprise networks via a Virtual Private Network (VPN). AT&T quickly and effectively responded to the COVID-19 pandemic with this solution, as many workers, including those in mission critical industries, transitioned to the home office. Looking ahead, the demand for remote access kits will continue to build as the nature of the workplace continues to flex and evolve
As businesses migrate workloads to the cloud in increasing volume, there is an opportunity for cable companies to expand their core communications offerings to Managed Cloud Services. From initial deployment to ongoing maintenance, security and monitoring, diversifying cloud infrastructure, and optimizing and scaling, there are several value pockets a managed cloud partner could unlock for cable customers. As shown in Figure 3, the Managed Cloud Services market is expected to more than double over the next several years.
Managed Cloud Services is another rapidly growing business where cable operators can leverage their existing business relationships, distribution scale, and technology and connectivity expertise to capture cloud revenue while cementing stronger customer relationships. Many cloud services are highly scalable, especially as-a-service (aaS) models (e.g., desktop-as-a-service, infrastructure-as-a-service, security-as-a-service). In a fragmented industry, the space currently many smaller players, creating market and acquisition opportunities.
As an example of an early cable mover, Cox acquired managed cloud service provider RapidScale in 2018, which now operates as a Cox Business company. Moreover, earlier this year (Q1 2023), Cox also acquired Logicworks, another cloud services provider delivering a range of services such as cloud computing, cloud automation, DevOps, security automation, and configuration management.
Cox appears to be combining the power of RapidScale and Logicworks as it grows its portfolio of cloud capabilities for business customers. In addition, unlike cable video, voice, and internet, these managed cloud services are not bound by the cable plant footprint. They can operate nationally, extending operators’ reach to new geographies and customers.
For 25 years, CMG has developed customized strategies for our clients to navigate the ever-evolving telecom landscape. Each operator has a unique combination of market opportunities, customer profiles, competitive landscape, and capabilities and assets, so assessing strategic options from a company-specific lens is critical. Contact CMG to learn more about how we can help your business tap into commercial opportunities and grow revenue.
