Comcast has made a big move into the medium-size commercial services sector with this morning's announcement that it has deployed metro Ethernet services in more than 20 markets across the nation.
While other cable operators, including Cox Communications and Cablevision's Optimum Lightpath division, have been cashing in on metro Ethernet services for some time, Comcast has been behind the curve until today. To date, Comcast has generated most of its commercial services revenue by providing services to small businesses, which are typically under 20 employees.
With today's metro Ethernet announcement, Comcast is now providing commercial services to medium-size businesses, which can range from 20 to 500 employees.
Comcast is delivering four metro Ethernet-based services over its fiber-optic and IP network to the following markets: Atlanta, Baltimore, Boston, Chicago, Denver, Detroit, Harrisburg, Pa., Hartford, Conn., Houston, Indianapolis, Jacksonville, Miami, Nashville, the state of New Jersey, Oakland, Philadelphia, Pittsburgh, Portland, Sacramento, Salt Lake City, San Francisco, San Jose, Seattle, Washington, D.C., and western New England. Comcast said additional markets would be launched on an ongoing basis.
Comcast is banking on its robust network to lure medium-size customers away from telecom providers and other competitors. By using Ethernet-based technologies, business customers can scale their bandwidth requirements for cloud computing, business continuity, business process automation, software-as-a-service (SaaS) and other applications.
In addition to the increased bandwidth and flexible service offerings, Ethernet-based services can also cost less than T-1 lines.
"I think our last mile is an incredible, unique asset, and the more ways that we can come up with to take advantage of that to meet the needs of small- and medium-size businesses, the better off we'll be," said Kevin O'Toole, senior vice president of product management and strategy for Comcast Business Services. "That is where you'll see us continue to focus a lot of energy.
"We think there's a lot of additional upside to be had in the metro Ethernet space as we go forward."
With its metro Ethernet offerings, Comcast can deliver bandwidth from 1 Mbps up to 10 Gbps that can be remotely scaled in increments of 1 Mbps, 10 Mbps, 100 Mbps or 1 Gbps and is offered with three different classes of service.
Comcast said it was the first carrier of metro Ethernet services to have all three certifications from the Metro Ethernet Forum (MEF 9, 14 and 18), all of which are backed by service-level agreements, and full-time monitoring from Comcast's dedicated network operations centers (NOCs). (For more on carrier Ethernet, including market projections, check out this recent CED wallchart.)
"Our fiber-rich network powers our metro Ethernet services and provides a secure, reliable and cost-effective solution for mid-size businesses' data needs," said Bill Stemper, president of Comcast Business Services. "Metro Ethernet is quickly overtaking T1 and other legacy services as the preferred technology for business communications. Just as broadband supplanted dial-up in consumers' homes, our new metro Ethernet services are designed to help businesses compete and win using our fast and scalable digital platform."
Comcast is offering the following four Metro Ethernet services:
- Ethernet Private Line Service – Point-to-point connectivity between two customer sites for bandwidth-intensive applications
- Ethernet Virtual Private Line Service – A point-to-multipoint connection that allows customers to tailor bandwidth, performance characteristics and cost to meet the needs of their applications
- Ethernet Network Service – Multipoint-to-multipoint connectivity to connect organizations with high-bandwidth requirements and multiple locations across Comcast's network
- Ethernet Dedicated Internet Access Service – Continuous, high-bandwidth connectivity between customers' LANs and the public Internet.
O'Toole provided more information on the services via Comcast's blog page.
In its recent first-quarter earnings report, Comcast's business services revenues were up 50 percent over the same quarter a year ago to $364 million. Last year, Comcast had $1.3 billion in commercial services revenue, which was the first time it topped $1 billion, and it expects to increase that amount to $1.6 billion this year.
While Comcast doesn't break out where those commercial service revenues come from, O'Toole said most of the revenues were from the small business sector.
As part of its move into providing commercial services to medium-size businesses, Comcast has been offering a primary rate interface (PRI) trunk replacement service across its footprint since the third quarter of last year, as well as launching a hosted PBX exchange trial in Boston and western New England.