Thursday, June 05, 2014

ILECs Giving Up on SMB

Two years ago (2012) at the FISPA Atlanta show, the executives at AT&T were being peppered with questions about the products available to combat cable. DSL and U-Verse (VDSL) are what is available for the small business. But what I heard (that went unsaid) is that AT&T had given up on the Small Business space.

The retire the copper mantra is really about getting higher ARPU and putting the cabash on CLECs. VZ is co-marketing cable, so you know that they have given up competing with cable.

This week, "Jeff Gardner, CEO of Windstream, told investors that cable will continue to focus most of its attention on the small to medium (SMB) business space. The customers that cable is chasing typically spend less than $750 a month. Unlike the larger enterprise space, SMB customers usually require a phone line and some data but not the managed services that Windstream provides." [fierce]

Basically, single site small business is being left for cable. Unless the small business is spending $750 or buying a bundles solution (more than just voice and broadband), the larger ILECs are giving that market to cable.

Now Frontier and Fairpoint will take that business all day long. But what is strange is that more than 70% of Windstream's revenue comes from selling broadband. More than 70%!!!! If you give up the ghost on broadband, you better be closing a lot of multi-site business, which is almost as hyper-competitive as government, education and healthcare.

Good advice: "Gardner said. "And so it's incumbent upon us to really focus over the next 15 to 24 months, as they are preoccupied with this large transaction and all the challenges that a big merger like that brings, to really continue to improve our game, to get better at that enterprise space so that we're well-positioned with our customers as they get better in this space."" Get your act together and shore up your market in the next year!

Note cable: "Comcast Business Services revenues rose 23.9 percent to $917 million. Likewise, Time Warner Cable reported business revenues rose to $402 million due to increases in high-speed data and voice subscribers, organic growth in cell tower backhaul." And Gardner is also worried because while TWC does a lot of wholesale business, Comcast notsomuch buh-bye.

No comments: