According to a survey by TNS, following years of success serving the small-to-medium sized business services (SMB) market, cable providers have made significant gains in providing wired voice and data services to companies in the large business (101+ employees) market over the past 24 months.
According to BusinessWave, TNS's quarterly commercial market survey of roughly 6,500 businesses, wired voice and data product spending attributable to cable providers rose more than 38%, climbing from 12.2% to 16.9% in two years. The main driver behind the growth was a heavier reliance on Internet service and the need for greater bandwidth; two areas where larger cable providers excel.
"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," wrote TNS Vice President Frank Perazzini. "The ability to market new voice services to a sizeable 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."
TNS's research also indicates that cable providers have had the most success migrating single product customers to bundled voice and data product customers. Over the two-year period, cable providers have upped their percentage of customers using a single provider for wired voice and data products from 38.6% to 54.1%, an increase of more than 40%. Over the same period, incumbent local exchange carriers (ILECs) experienced a slight decline while competitive local exchange carriers (CLECs) managed an increase of 9%.
"Bundling is hardly new," notes Perazzini. "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."
Results from BusinessWave further suggest that location penetration among cable providers serving the large business market will continue in the short term as ILECs race to stem losses through network equipment upgrades and expansion of their fiber service areas. Over a two-year period, cable providers have increased the penetration of business locations they serve by more than 50% while ILEC penetration dipped nearly 14% and the CLEC share remained relatively unchanged.