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Comcast Corp (Nasdaq:CMCSA), Time Warner Cable Inc (NYSE:TWC) Looking to Business for Growth


Sunday, March 28th, 2010

With the residential cable market pretty much matured in the United States, cable companies like Comcast Corp (Nasdaq:CMCSA) and Time Warner Cable Inc (NYSE:TWC) have been desperately seeking new sectors they could find to expand their businesses, and seem to have found it in the business sector, especially with small to medium-sized businesses.

One great benefit the cable companies enjoy is they already have the infrastructure in place, to serve the business sector doesn't add much in costs from that aspect of things, so can concentrate on developing services businesses want and then marketing those services to them.

That means there is less risk involved and they can move quickly to gain new business and growth.

In the short term the challenge is to try to convince businesses to spend money on new services, as we're really still in a recession, no matter what the official line promoted by mainstream media is.

The strategy of the cable companies to date has been to target the smaller business market, which they have done fairly successfully, and now they're not only enlarging their efforts there, but going on to companies with more than 20 employees, and up to 250 workers.

According to Comcast, they're competing at price at this time in order to get their business services into the businesses, from there they'll probably start raising prices as the economy gets better businesses use them over a period of time, generating significant profits and not only revenue.

While there has been boasting of revenue growth in the sector, the bottom line is how much profits will be generated from the new services put in place. We probably won't know that answer for a couple of years when the economy actually does start to recover.

Nonetheless, it is one of the few growth areas available to the cable companies at this time, and that's good news for them and their shareholders if they can turn it into meaningful profits.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: cable companies , comcast , growth , telecommunicatons , time warner cable