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Tuning in to what businesses need from cable providers

Comcast aims to grow its foothold in Garden State and in the boardroom

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LeAnn Talbot says business ‘is the growth engine for us,’ and industry watchers say courtship of companies from telecom is intensifying.
LeAnn Talbot says business ‘is the growth engine for us,’ and industry watchers say courtship of companies from telecom is intensifying. - (AARON HOUSTON)

If you haven't heard from LeAnn Talbot or her staff yet, you will. The regional head of Comcast is making an aggressive push into the business marketplace.

Comcast's 1 million New Jersey customers are now mostly residential television, Internet and phone consumers, but Talbot is working to change that. Business services is one of Comcast's smallest units, but it's among the fastest growing: the company reported that 2012 business services revenue grew 34.2 percent, to $2.4 billion. Total company revenue hit $62.6 billion last year, up 12 percent.

“Business is the growth engine for us: it's very, very critical to our success,” Talbot said during an interview at a Comcast facility in Voorhees, where more than 600 employees answer customer inquiries and provide technical support to the cable network.

Evidence of how stiff the competition is with Verizon and others: Talbot declined to name major commercial customers, say what percentage of her New Jersey customers are businesses or predict where Comcast business services sales might be in five years.

Growing business services is not an easy task. While a new residential customer comes on board in a matter of days, “the on-ramp is longer” in the business market, “because it is more complicated — it can take three to six months” to land a business client, Talbot said. And Comcast is up against seasoned competitors: Verizon and other telecom companies may have served that client for decades, “and now, here we come,” Talbot said.

But Comcast is a national brand, and that helps get their foot in the door. “The opportunity for us lies in seeing how as a national company we go into those businesses that cross different geographic areas,” Talbot said. As Comcast moves up the food chain to land nationwide businesses, “our next step is really looking at those national accounts and learning those industries — like health care and hospitality — and working with business leaders to say, 'Where is technology taking you, and how can we be a player in that?' ”

Comcast began courting commercial customers in 2006, first by signing up small businesses with fewer than 20 workers, then moving up to midsized firms with up to 500 employees. In New Jersey, “we have everything from pizza parlors to some hospitals and some Atlantic City casinos,” Talbot said.

Comcast competes with Verizon Fios in about half its footprint in New Jersey, Talbot said. Ian Olgeirson, senior telecom analyst at the research firm SNL Kagan, said in non-Fios areas, “Comcast has an edge” because Verizon's non-Fios markets don't offer a video service. He said when Comcast and Verizon compete head-to-head in Fios markets, “competition comes down to product offerings and to service and execution, and certainly Comcast is an able competitor.”

Talbot said Comcast continues to grow. “We have been taking quite a bit of market share,” said Talbot, though declined to say what Comcast's share is. Analysts said they did not have Comcast's market share for New Jersey.

Comcast's market share gains come from long-established telecommunications firms like Verizon that still provide the vast majority of telephone and Internet services to businesses, experts said. As Comcast seeks to make inroads in this sector, Comcast's strategy is “making sure you have the products, the pricing and the knowledgeable work force, and then we tailor our products to what the business wants,” which is usually phone and high-speed Internet, but can also include the computer monitoring services that Comcast offers.

Cable came late to the business market, but is moving fast to catch up, according to Fran Caulfield, research director for Insight Research. “Cable companies were almost 100 percent focused on residential for as long as they existed,” he said. “About five years ago, they recognized that business is a valuable market they were not tapping, and they've gone after it.”

Caulfield said, “Cable companies have put salespeople out on the street to knock on business doors and have come out with some advanced, true telecom business services that they can sell to midsized and larger businesses.” He said nationally, cable has only about 7 percent of the business market “but that started at almost nothing five years ago, and it's becoming a more significant threat to the entrenched telecom providers who have been in the business service market for decades.”

In the residential market in New Jersey, Comcast competes with satellite television providers and with Verizon Fios, the fiber-to-the-home service that delivers high-speed Internet, phone and television. In its foray into the wireless market, Comcast has blanketed the state with its Xfinity Wi-Fi hot spots, enabling customers to access all their Comcast video, Internet and smartphone services away from home.

E-mail to: beth@njbiz.com
On Twitter: @bethfitzgerald8

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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