Comcast Corp. - content to sell cable-TV or high-speed Internet to homeowners and small businesses for years - is now targeting Vanguard, Apple, Amazon, General Motors, Coca-Cola, and other big companies for data-transmission services.
Seeking new growth after the Time Warner Cable Inc. smackdown this spring, Comcast will challenge AT&T Inc. and Verizon Communication Inc. in their lucrative businesses serving the telecom needs of Fortune 500 companies with hundreds or thousands of nationwide locations.
Comcast believes it can take market share as the historic telco giants focus managerial attention on capital-hungry wireless franchises for consumers.
Comcast has an "early book of business" of 25 to 30 clients, some of which could pay $250,000 to $300,000 a month for services, Bill Stemper, the head of Comcast Business, said this week.
It's an estimated $30 billion market, according to the research firm IDC. "This gets Comcast into a different order of magnitude," said Melanie Posey, an IDC research vice president. "Comcast is positioned to be an alternate provider with these Fortune 500 companies that have contracts with AT&T or Verizon. There is no reason that Comcast can't get in there and chip away at some of that business."
For years, Comcast has been restrained from offering national telecom services because its network was mostly confined to its cable-TV franchise territories.
To solve this problem, Comcast negotiated network agreements with Time Warner Cable, Charter Communications, and Cox Communications, Stemper said. These other cable operators will provide network data transmission and technical services in their franchise areas for Comcast - as Comcast will do for them if they sell national telecom services to big companies. Stemper called it a national "cable-first solution."
Comcast also can attack the flank of a newly emboldened rival. AT&T acquired DirecTV over the summer and now is the nation's largest pay-TV operator, a crown held by Comcast for more than a decade.
Stemper, a former AT&T executive, said that serving Fortune 500 companies was a "pride and joy" for AT&T and Verizon. But Comcast will be "going after all businesses of all sizes nationwide," he said.
The Philadelphia company will work with big businesses "and look at their network needs regardless of geography," he said.
Comcast has hired industry veteran Glenn Katz, a former CEO of Spacenet Inc., and acquired a company, Contingent Network Services, that helps large corporations outsource network operations.
Stemper says he believes that Comcast can offer lower prices and faster data speeds to businesses, many of which still use outdated T1 lines with speeds of 1.5 megabits per second. About 70 percent of Comcast's residential customers nationally get Internet speeds of 50 megabits per second.
Comcast modestly launched its business services unit seven or eight years ago, wiring pizza parlors, doctors' offices, and other small businesses. It eventually expanded into mid-sized markets.
With revenue of about $4 billion a year, the business services unit has connected Comcast's communications network to 400 data centers nationally, a key selling point when contacting big businesses, Stemper said. "That's the only way we can advance," he said, "with examples, not bravado."