Comcast Business’ Nitel acquisition enhances its managed networking capabilities
Comcast Business has negotiated a deal to acquire network-as-a-service (NaaS) provider Nitel, deepening its cloud-based network capabilities.
Nitel is a network-as-a-service (NaaS) provider specializing in delivering advanced managed services and connectivity solutions to enterprise customers across the U.S.
One of the elements that Nitel brings to Comcast Business is its customer base.
Nitel has expertise in providing integrated managed network and security solutions to its 6,600 clients nationwide. Its strong focus is on mid-size enterprise clients, including those in financial services, healthcare, and education.
Adding Nitel’s comprehensive solutions and specialized cloud-based services to Comcast Business’ advanced connectivity portfolio will provide further growth opportunities.
Comcast Business’ acquisition of Nitel is subject to regulatory approvals and other customary closing conditions. As a result of the deal, international private equity firm Cinven will sell its stake in Nitel.
Financial terms of the acquisition were not disclosed.
Comcast Business President Edward Zimmermann said Nitel’s “addition to our portfolio will strengthen our capabilities in advanced network, cloud, and cybersecurity solutions.”
Ramping SD-WAN
On the services front, SD-WAN is one area in the Nitel acquisition that could help Comcast's Business.
Earlier this year, Nitel expanded its SD-WAN portfolio with Fortinet technology, enabling it to enhance its network management and security solutions.
The SD-WAN move came after Nitel acquired Cleveland-based WAN Dynamics. This acquisition strengthened Nitel’s position and capabilities around its managed SD-WAN offering.
Besides Nitel, Comcast Business has actively built its SD-WAN portfolio via organic development and target acquisitions.
In 2021, Comcast Business completed its acquisition of Masergy, a Plano, Texas-based pioneer in software-defined networking (SDN) and cloud platforms for global enterprises.
By acquiring Masergy, Comcast Business immediately expanded its ability to serve large and mid-size companies, particularly U.S.-based organizations, with multi-site global operations, and bolstered its overall channel distribution strategy.
The combined capabilities for Nitel and Masergy could position Comcast Business to gain a more significant foothold in the SD-WAN market segment, which is ripe for growth.
A recent IDC forecast data shows that through 2027, the market will grow at a compound annual growth rate of 10.1% to reach $7.5 billion.
Taking enterprise share
Comcast Business’ bid for Nitel comes as it continues to see growth with enterprise customers.
During the third quarter, Comcast Business’ connectivity revenue grew 5% to $2.42 billion, up from $2.3 billion.
Revenue for Business Services Connectivity increased due to an increase in revenue from medium-sized and enterprise customers and an increase in revenue from small business customers driven by higher average rates.
During the third-quarter earnings call, Comcast's CFO Jason Armstrong said that Business Services Connectivity's revenue rose due to increased revenue from medium-sized and enterprise customers.
“Business services connectivity revenue growth of 5% reflects steady growth in small business and even faster growth in enterprise,” he said. “At the enterprise level, we are taking share and continue to scale this business.
Likewise, Comcast saw an increase in revenue from small business customers driven by higher average rates.
“Small businesses continue to be a competitive market, but we are growing revenue with ARPU growth driven by higher adoption of a suite of additional products that expand our relationship with our SMB customers,” Armstrong said.
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Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.