Cox Communications Inc. expects to generate $2 billion annually from selling high-speed Internet, phone and video service to commercial customers within six years, and the company expects the health care industry to eventually become the biggest vertical generating that revenue, a top executive said in New York City today.*
“Cable can help cure some of the ills of the healthcare industry,” Cox Business vice president Phil Meeks said at a Light Reading conference on the Future of Cable Business Services. “I am convinced that technology not only can but will transform the way we do business in the health care space.”
Meeks said Cox would have hit $1 billion in commercial services revenue in 2009 if its Las Vegas system hadn’t taken such a big hit from the sagging economy, mostly in the hospitality and gaming sectors. But he said Cox projects that it will hit $1 billion in commercial revenue next year.
“We will definitely make that number in 2010. I’m already getting questions from my boss about when are you going to make the next billion,” Meeks added.
Cox entered the commercial sector in 1993, when its Hampton Roads, Va., system began signing business customers. Today, the MSO counts about 250,000 commercial customers.
With about 50 percent of the U.S. population projected to be 50 years or older by 2040, Cox is looking to profit by wiring hospitals, local doctors offices and consumer homes for remote health care services, Meeks said. The home healthcare sector will also be driven by economic stimulus packages from the federal government, which call for the digitization of healthcare records.
“That’s a huge development for companies like Cox. Once these medical records are digitized, it opens up whole new worlds,” he added.
Many medical services that are performed today in a doctor’s office or hospital would be able to conducted through remote healthcare services enabled by the cable pipe, Meeks said.
“We’re creating this ecosystem where we’re tying together the hospital, tying it to the doctor’s office, and tying it to the home. Elder care, home diagnostics and home monitoring will be a huge movement in this space,” Meeks added.
The digitization of medical records and remote health care services will reduce costs and cut the amount of time patients spend in hospital waiting rooms, Meeks said.
Revenue from the healthcare industry represents a small fraction of Cox’s commercial revenue today. Meeks pegged the number in the “mid-teens percent of our overall revenue.”
But he said that healthcare revenue would grow to a much larger share of Cox’s business services revenue.
In addition to generating revenue from high-speed data, phone and video services sold to healthcare providers, Cox also expects to profit by developing applications that will be used by doctors, Meeks added.
*Ed note: The story originally said healthcare would generate most of the $2 billion in revenue. In fact, healthcare will be the biggest vertical generating commercial services revenue.