After luring millions of residential phone customers from Baby Bells such as Qwest in recent years, cable companies have a new target for their triple play of video, voice and Internet services: businesses.
Stamford, Conn.-based Time Warner Cable launched its commercial phone service in a handful of cities about three weeks ago and will expand to a majority of its markets throughout the year, spokesman Justin Venech said Monday.
Philadelphia-based Comcast isn’t far behind.
“Now that the rollout of our residential triple play offer is complete, we will begin to roll out our commercial version,” Comcast spokeswoman Cindy Parsons said in an e-mail Monday.
Parsons said the company is testing its commercial phone service in Denver and expects to “expand the trial in additional areas in the West division over the coming weeks.”
The company plans to spend $250 million this year to upgrade its network to service businesses.
Comcast has its eyes on 5 million small-to-medium-sized businesses in its national service territory, which represents a potential $12 billion to $15 billion in annual revenue. The company is focused on businesses with 20 or fewer employees, Parsons said.
The company has reeled in 2.4 million residential phone customers, or 7 percent of homes in its service area, about two years after launching digital voice.
Janco Partners analyst Donna Jaegers said Comcast is squarely aiming at Denver-based Qwest. Comcast competes for residential customers in the majority of Qwest’s 14-state local phone service territory.
“As they ramp up in this activity, that’s a core part of Qwest’s business,” Jaegers said. “A lot of those smaller businesses really don’t feel like they have other choices for service besides Qwest.”
Qwest has prepared for the increase in competition. Last year, the company created a “middle markets” group that specifically handles small businesses. The group has about 400 employees.
“We thought there was a great opportunity for Qwest to differentiate ourselves, and that was part of the reason behind my creating our middle-markets group and adding significant resources,” said Tom Richards, executive vice president of Qwest’s business-markets group.
During the first quarter, Qwest’s business-markets group – which includes small and large commercial customers – accounted for about $1 billion of Qwest’s $3.45 billion in revenue.
Richards said the marketplace already is crowded, even without Comcast in the mix. He relayed a story in which Qwest was trying to win business about two weeks ago from a company that had already received five other proposals. “It gives you a perspective for the intensity of competition already in that space,” Richards said.
Over the past few years, dozens of small Internet-based phone companies have sprouted that specifically target small and medium-sized businesses.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
