MUMBAI: The US cable TV Multiple System Operators (MSOs) may generate over $7 billion in revenues in 2012 providing telecommunications services to businesses.
But they will be chasing a declining business in telecom services segment and face fierce competition from entrenched telco providers with deep pockets ready to staunchly defend their existing base.
This was the finding of a new market research study from The Insight Research Corporation.
Cable operators will gain some market share, but they will remain small players in a big industry with low margins and little cash flow, the study noted.
Insight Research‘s market analysis study, "Cable TV Enterprise Services, 2012-2017" provides a sobering view for cable providers, who have been touting the business services market as a profitable respite from their mature residential video business.
Business services is the second largest segment in the US telecommunications landscape next to wireless services. While cable operators have had some recent success in growing their single-digit share of this market, they will face major obstacles trying to take significant share in this modest growth segment.
"While their legacy in providing services to residential segments may give them confidence they can grow profitably in this adjacent segment, the cable operator‘s challenges will be steep and growth is dependent upon taking market share from entrenched players" says Fran Caulfield, Research Director at Insight Research.
"Our study concludes that despite these obstacles, cable operators will forge ahead and the entrenched telco providers will likely respond with investments, price, and improved performance to combat this threat. It should be an interesting few years," Caulfield concluded.
"Cable TV Enterprise Services, 2012-2017" segments revenue estimates for telco and cable operators providing basic voice, data, and video services offered to the small, medium and large enterprise business segments. Detailed revenue estimates are provided for a range of business services, including ethernet, private lines, voice services, web hosting, optical transport, and video.
