Cox has demonstrated their prowess in the lucrative SMB market for telecom services. They now count 250,000 business customers nationwide with about 600,000 business voice lines in service. All of which came at the expense of their telco competitors. In some markets, Cox sees an SMB penetration rate as high as 60%. The SMB and enterprise market was once the sole domain of telco incumbents. The CLEC movement started to chip away at that dominance many years ago, and cable MSOs now view the SMB market as a true growth engine for themselves. Multichannel News highlights how Cox now intends to leverage the economic downturn to further their SMB success, by emphasizing value for their services over telco competitors.
“The economy is opening up the minds of smaller and medium-size businesses,” Kristine Faulkner, Cox Business vice president of product development and management, said in a Multichannel News interview. “Now they’re saying, ‘Maybe I should look at the cable company.’ Our call volumes are up because businesses are looking to save money.” Indeed, the combination of new IP powered services and the evolving telecom needs of small business has created a window of opportunity for all carriers, cable MSOs included, to expand their SMB offerings. Small businesses are looking for flexibility, productivity enhancing features, all while saving money. Telco incumbents have historically been slow to adapt to these changes – after all – that T1 revenue was quite lucrative. The success of companies like Cox and a number of IP focused upstarts has awakened that telco ‘beast.’ The result should be a pitched battle over the tens of billions at stake for small and medium business customers. For Cox, the opportunity in their current 18 market footprint is $5.7 billion alone. They now generate close to $1 billion, highlighting their tremendous growth opportunity.