Phil Meeks, Senior VP of Cox Business, is in good spirits these days. Buoyed by ongoing revenue gains in commercial and carrier services, Cox Business reached its $1 billion revenue milestone in December. Meeks believes what's made the company successful in the SMB space is that it has "built specific product bundles and offerings for those small businesses and we have sales, support and technical people in those markets." And while other large MSOs are only recently expanding their business units, Cox has been working in the commercial sector since 1993. FierceTelecom Senior Editor Sean Buckley caught up with Meeks to talk about the $1 billion revenue milestone and what new opportunities are ahead for the company in 2011 and beyond.
FierceTelecom: Cox Business recently achieved $1 billion in revenue growth. What has helped you achieve this milestone?
Meeks: We recently had a big internal event here in corporate and in the field to celebrate the milestone. To answer your question, how did we do it? Well, you were beginning to hit on part of that, which is we started doing business offering services 18 years ago in Hampton Roads, Va. If you look at the MSOs, we were the first to go after the business market before any of the other MSOs and as a result we were the first to reach that $1 billion milestone. More generally, we focused on that market niche of companies that have 20 employees and below. That's a market we do really well and the competition has not figured out to grow market share there. We're taking market share away from the ILECs in that space because we built specific product bundles and offerings for those small businesses and we have sales, support and technical people in those markets. We're in 18 markets around the country and despite that we're a big nationwide company, we still have the flavor and provide the support of a locally-based company when you look at how we do business in the marketplace. When you look at how we do business, I think our success is the result of two things: building the right products for that low end of the SMB and having those local resources in the markets selling and serving those customers.
FierceTelecom: Okay, so your bread and butter customer are the SMBs. What kinds of services are they looking for? Traditional phone service, data, video or is it all of the above?
Meeks: It's a question we ask ourselves and our customers all of the time. I don't think there's one answer to that question, but there are probably two or three things I would highlight. One is customers are looking for a provider who can simplify technology. Most small companies don't have IT staff or a lot of in-house IT expertise. If we can come in and help them find the right technology bundle to help them run their business more effectively, then that's an important thing. The second thing they are looking for is reliability. We have been recognized by JD Power as the number one provider of data services in the SMB marketplace. They're looking for simplicity and reliability and of course price is always an important consideration, but as I think we talked before in the past we don't lead as a low-priced provider in the marketplace. Instead, we make sure our customers are buying bundles of technology from us and as they move from those ILEC legacy platforms and products, we're putting them on a better product and technology at a typically lower price point than what they were paying for their ILEC services.
FierceTelecom: Outside of the SMB market, Cox Business has also been advancing your presence medium-sized businesses. What kind of penetration are you seeing in that segment?
Meeks: We certainly won't move away from our bread and butter customer base, but our strategy and aspiration is to focus on a couple of other things. As we look up market, we're focusing on companies or industries that I would call large locals. By that I mean universities, hospitals and school systems--those types of enterprises that are geographically densely concentrated in our footprint. We don't have the overhang of network reach. We're looking at those types of companies and building some focus around those key verticals in government, education and healthcare. We're looking at how we build products and support around those three verticals. Those are three verticals we have done well in so far, but as we put more and more focus on those verticals in the next four to five years we expect more robust growth across those key verticals as we move up market.
I guess the other big area where we are looking at to get the next billion is in our wholesale space. Our carrier revenue grew robustly in 2010. Year to date through November they are growing in mid-to-20 percent range. A lot of that is driven by wireless backhaul and some of the explosiveness in wireless data services across the wireless providers. We anticipate continued growth in carrier services as we harvest growth in wireless backhaul and traditional carrier to carrier wholesale opportunities and exploring next-generation wholesale services such as picocell and Ethernet seamless platforms tying together carrier's enterprise locations.
Continue to Part 2 >>