When Ethel Merman belted out "There’s No Business Like Show Business," she wasn’t rhapsodizing about telecommunications. And when Bachman Turner Overdrive sang about "Taking Care of Business," they didn’t mean delivering bundled services to the local doctor’s office.
But when cable industry members populated a panel called "The Business of Business: Growing a New Service Segment" at The Cable Show in Las Vegas, they were talking about a David and Goliath battle against those big ol’ telcos who’ve been providing dialup phone service to Dr. Feelgood since Geraldine ran the switchboard.
Business is big in small towns, and providing voice, data and even video to local commercial customers is a "high margin business" for the telcos. Cable has a "strategic opportunity to go after that business and hurt them," said Ken Fitzpatrick, senior vice president of Time Warner Cable Business and not a man to mince words.
In Fitzpatrick’s vision, not only can cable slam the telcos where they live – in the hometown pharmacies, law offices and car dealerships – but it can also make the guys at corporate HQ stand up, take notice and perhaps "distract these players and have them redirect their dollars and their focus to compete with the cable industry" in the commercial rather than the video space. It’s all in the timing This might seem a bit Pollyanna-esque – the telcos hardly seem set to rip up their plans for FiOS and IPTV and return to the basics of delivering dial tone – but there’s no denying that there’s a big market opportunity in the local business space for whoever wants to provide a little hand-holding and friendly service to the moms and pops who pay big bucks for a little service.
"The timing is right," said Fitzpatrick. "As an industry, we’re starting to change to a communications giant competing against phone companies."
Like politics, all business is local, and that’s where cable, having grown up in the center of town and spread its wings from there, has its best opportunity, said Steve Trippe, vice president and general manager of Charter Communications in St. Louis.
"We’re finding a lot of business customers want to come to us," he said.
The first and most important thing a cable operator must do is be sure that those selling and servicing residential customers understand that business is complementary, not competitive, and that operations within the back office are humming in harmony.
"You find it hard to believe you’d be competing against yourself, but we really were competing against ourselves," said Trippe.
That meant tearing down the silos separating residential and commercial services – literally and figuratively – and putting everyone on the same page because "business customers will help you improve the bottom line for your residential customers" because operations need to be tightened, and service quality needs to be improved and guaranteed, or business customers walk. Those same characteristics then trickle down to the residential space.
Some of the back-office silos such as billing and customer care are easier to tear down than others like entrenched mindsets and political turf. Even so, Charter managed to merge its business team into overall operations and dedicate technicians to commercial customers as it brought in a separate but equal business focus.
MSOs who want a piece of the commercial pie should make sure they slice and dice their networks to facilitate coverage. In Las Vegas, where Cox Communications has had an aggressive commercial business "for the past few years," only 50 percent of the businesses that could be served are passed by cable plant, said Leo Brennan, regional vice president and general manager of Cox Communications, Las Vegas.
Cox is targeting potential commercial customers when it rolls out new plant or upgrades existing plant. In addition to homes passed, it’s looking at – and actually building plant to be near – businesses. Small-medium businesses (SMBs) – the holy grail of the cable commercial space – are only part of the target in Las Vegas, where hospitality is king and 16 of the 20 largest hotels in the world rake in bucks and bedheads.
Besides selling the normal high-speed data services to these businesses – raise your hand if you had a Cox high-speed Internet connection at your hotel during the show; keep it raised if you at least once used foul language about it or the hotel offering it up – Cox is also adding telephony into the mix.
"We needed to do some more intense training with our teams to focus on commercial phone," said Brennan. This included "creating a five-nines mindset. It’s a lot different than serving your residential customers."
Serving businesses is reminiscent of cable’s early residential days when sales people followed the coax down the street and signed up customers who were clamoring for more and clearer TV channels. Today’s business customers want more features, lower prices and higher speeds, and "there are a lot of businesses you can serve just based on the fact that you’re passing them," said Brennan. – Jim Barthold