Why Comcast Continues to Be Optimistic about Business Services
Comcast’s outlook on business services
Comcast (CMCSA) expects double-digit growth for its Business Services segment for the next couple of years. Comcast’s Business Services segment has three growth engines: small businesses, mid-sized businesses, and enterprises.
Comcast stated at the Morgan Stanley Technology, Media & Telecom Conference that its Business Services segment is currently its “fastest-growing business.” Comcast also said that it has a penetration of 20% for small businesses and 15% penetration for mid-sized businesses. However, its penetration rate for mid-sized businesses is on the rise.
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According to Comcast, enterprises present an opportunity of around $13 billion to $15 billion. Comcast also said that its Business Services segment has been growing by about $0.75 billion per year over the past few years.
Business Services in fiscal 4Q16
Comcast’s Business Services had revenues of $1.4 billion in fiscal 4Q16, up by 14.5% over fiscal 4Q15. In fiscal 4Q16, small businesses accounted for 70% of Comcast’s Business Services revenue, growing by a strong 60% year-over-year.
Thus, in fiscal 4Q16, mid-sized and small businesses continued to be strong growth engines for the Business Services segment.