Business Services: A Giant Stirs

Ron Hendrickson

Ron Hendrickson

As BTR reports with some frequency, cable has been making significant progress in the commercial services business. As we’ve also noted previously, it’s only a matter of time before the big telcos take note and begin to more vigorously defend their turf. And now one has.

The telco in question is Verizon (NYSE:VZ), and it’s just launched a program to better serve medium-sized businesses. The press release didn’t say so (nor would I expect it to), but the move is almost certainly in response to cable operators’ increasingly successful efforts to woo medium and larger enterprises.

Examples of cable’s growing focus on larger enterprises abound. Comcast (NASDAQ:CMCSA) just nailed down two good-sized business accounts, one with the city of West Haven, CT, and the other with the Baltimore Technology Park. The MSO also recently launched a business-to-business software market and gained MEF Carrier Ethernet 2.0 certification. The other big MSOs have been busy as well, including cable business services pioneer Cox Communications, Time Warner Cable (NYSE:TWC), and even Cogeco Cable (TSX:CCA) in Canada. And those are just some of the more recent examples.

So the threat that cable poses to this particular slice of the telcos’ bread and butter is both real and growing. Moreover, providing commercial services at the medium and larger enterprise level is pretty much a zero-sum game: Getting the business means taking it away from someone else. The telcos have a lot to lose in this space.

Considering the potential for loss, Verizon’s response to date is surprisingly tentative. Perhaps they still don’t take the threat seriously, or maybe they’re just busy buttering other slices of bread. Or, more likely, it’s just a first step. It’ll be interesting to see how this develops over time.

Ron Hendrickson is BTR’s managing editor. Reach him at ron@btreport.net.

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