TW Cable Eyes 20% Jump in Business Revenues
LR Cable News Analysis Light Reading 12/2/2010
NEW YORK -- The Future of Cable Business Services -- Time Warner Cable Inc. (NYSE: TWC) is on track to hit its goal of scoring a 20 percent increase in revenue from commercial services in 2010, a top company executive said here yesterday.
"We have a strong proposition that we are going to make that number," said Time Warner Cable Business Class SVP of services sales and marketing Craig Collins. He said there are 3 million businesses within Time Warner Cable's footprint which represent "$25 billion worth of opportunity."
"It's huge -- we've just been nicking at the surface here," he added. (See Cable's $5B Biz Services Bonanza .)
Hiring 200 local sales reps in the fourth quarter of 2009, along with centralizing its operating structure from 32 divisions to six regions, contributed to the increase in commercial revenue, Collins said. (See Time Warner Cable to Shut Down Nat'l Division .)
Collins, late of AT&T Inc. (NYSE: T) and Bell Atlantic, said TWC expects it can take business away from telcos by targeting businesses with 100 employees or less, which he called the company's "sweet spot."
With millions of consumers using bandwidth-hungry smartphones, Time Warner Cable is poised to drive revenue from providing cellular tower backhaul services to wireless providers, Collins said. Time Warner Cable will generate at least $75 million in revenue from cellular backhaul services in 2010 through the 5,100 cellular towers that it has wired nationwide, according to a new forecast from Heavy Reading. (See Cable's $5B Biz Services Bonanza .)
Collins said the MSO is also running trials on cloud-based commercial products such as messaging, backup, and storage services, and collaboration services for businesses.
Sincerest form of flattery
Time Warner Cable is also looking to emulate some of the more successful strategies of Apple Inc. (Nasdaq: AAPL), Target, and Netflix Inc. (Nasdaq: NFLX), Collins said. He praised Apple's success in building customer relationships rather than just selling products and services, noting how a customer who buys a Mac computer after using an iPhone or iPad "triples Apple's revenue from that one customer relationship."
Target has succeeded by replicating Wal-Mart's pricing strategy, and more than 90 percent of Netflix customers evangelize the brand, helping it attract customers. Time Warner Cable also wants to make its brand viral, Collins said. "If you can use your customers to help you sell, why wouldn't you?"
Time Warner hopes to increase revenue by hiring more local sales reps and dedicating reps to major national accounts "to deal with customers the way they want to be dealt with," Collins said. The company will also expand its sales channels by working with third-party agents that have been "clamoring to work with us," Collins added.
— Steve Donohue, Special to Light Reading Cable