Coax CableCable service providers have been making inroads into the large-business market for voice and data services over the course of the past two years, according to business consulting and research provider TNS. Incumbent telcos are most vulnerable and at risk from these market incursions, which comes on the heels of cable companies´ success providing wired voice and data services to small- and medium-sized businesses (SMBs).

Surveying some 6,500 businesses for its latest quarterly commercial market survey, TNS found that large companies spent 38 percent more on wired voice and data services from cable providers over the two-year period. The percentage of these revenues paid to cable providers rose from 12.2 to 16.9 percent during this time frame, TNS highlights in a press release.

Cable Large-Business Market Share
Greater reliance on Internet service and the need for more bandwidth were key factors fueling growth, TNS stated in its latest BusinessWave report. Cable companies excel on both counts, TNS added.

“The rollout of advanced voice services by cable providers over the past few years has afforded them the opportunity to make significant progress at the high-end of the market,” TNS VP Frank Perazzini was quoted as saying.

“The ability to market new voice services to a sizable base of data customers is very important. Because companies had an established history of service with their data services, cable providers enjoyed a high level of credibility that was necessary to gain traction with their new voice offer.”

Cable providers also had the greatest success in up-selling customers, convincing them to upgrade from single product to bundled voice and data offerings, TNS pointed out. The percentage of cable company customers using a single provider for both wired voice and data services rose from 38.6 to 54.1 percent during the last two years, an increase of more than 40 percent.

In contrast, the corresponding percentage for incumbent local exchange companies (ILECs) declined slightly. That for competitive local exchange companies (CLECs) rose 9 percent.

“Bundling is hardly new,” Perazzini commented, ¨but the high-end of the business market generally does not offer service providers the opportunity to propose a bundle until a provider has proven they can provide superior single product service over an extended period of time.”

Local market penetration of business locations served by cable providers has increased more than 50 percent over the two-year period while that for ILECs fell nearly 14 percent and CLECs held about steady, according to TNS.

TNS expects cable providers’ share of large-businesses’ wired voice and data services will continue to rise in the near term. ILECs will and are rushing to upgrade network equipment and expand the reach of their fiber networks in response, researchers said.

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