No need to panic: cable MSO business services offsetting video losses

Michelle Clancy | 26-11-2013

US cable and satellite service providers are losing three-quarters of a million residential video subscribers each year, but investors are not panicking as the losses are offset by growth in broadband and business services.

According to a market research study from Insight Research, US cable MSOs are on track this year to reach $8.8 billion in annual revenue providing telecommunications services to small and medium-size businesses, despite competition from entrenched telco providers, who have owned this segment for the past 30 years.

Insight Research's market analysis study provides an optimistic view for cable providers, who have been touting the business services market as a profitable alternative to their mature residential video business.

Next to wireless services, business services is the second largest segment in the $500 billion US telecommunications landscape. Cable operators have demonstrated double-digit revenue growth in business services over the past few years, while their market share is approaching 10%.

"Cable companies continue to demonstrate strength in leveraging their existing HFC networks and in providing new business services, such as mobile backhaul, Wi-Fi access, and Ethernet services," said Fran Caulfield, research director at Insight Research. "Our research also shows that they continue to take market share from the entrenched telco providers, who have yet to become aggressive with pricing, investment, and quality in defending their market position."