Comcast Business Q1 revenues jump 17.5% to $1.3B as mid-sized business purchasing surges

Comcast Business (NASDAQ: CMCSA) continues to make a good showing amid the cable operator's overall revenue mix as it sees more mid-sized businesses purchasing its services.

For the first quarter, business services revenue rose 17.5 percent to $1.3 billion due to an increase in the number of small business customers as well as continued growth in medium-sized business customers.

Speaking to investors during its first quarter 2016 earnings call, Michael Cavanagh, CFO of Comcast, said that while the small business segment is still growing, medium-sized businesses are jumping ahead.  

"Revenue for the mid-sized business segment is growing at a faster rate than the small business segment, increasing its contribution as a percentage of total business revenue," Cavanagh said.

Comcast Business has continued to enhance its standing in the medium business and large business segments.

In addition to launching its enterprise division last year to target satellite offices of larger businesses, the service provider has continued to expand its fiber network in key markets and enhance its product set.

The service provider recently won a deal to provide Gigabit Ethernet service for Bethesda Green, an incubator for environmentally sustainable businesses in Montgomery County, Md., illustrating its growing presence in the business sector. It also dedicated $1.2 million to extend its network into two large parts of Bellevue, Wash., to pass an additional 425 local businesses.

To capitalize on the growing cloud services trend, Comcast started offering business customers direct links to Amazon Web Services (NASDAQ: AMZN) through its status as an AWS Partner, giving customers private network connectivity to over 1 million Ethernet-enabled buildings.

Cavanagh said that "overall business services has strong positive momentum and continues to represent a large and attractive growth opportunity for the company."

That's not to say that SMB service revenues aren't continuing to grow. Small business revenues consist of about 75 percent of the company's revenue and represent 60 percent of growth.

Comcast also weighed in on the FCC's pending review of the special access market, one that the cable MSO serves by providing wholesale services to other CLECs.

Neil Smit, CEO and President of Comcast Cable, said he could not make a specific comment on the proceeding, but cautioned the FCC from adopting rules that would make it harder for newer providers to get a piece of the business.

"The chairman claimed that there was limited competition in the business data services area and it needed more regulation, but I would say that we compete every day for that business and it seems counterintuitive that the FCC would want to impose regulations on a new entrant such as us that would bring more competition to the business," Smit said. "I think we have not seen the proposed rulemaking yet so it's probably premature to comment further on it."

Overall, Comcast's first quarter 2016 consolidated revenue increased 5.3 percent to $18.8 billion.

For more:
- see the earnings release
- listen to the earnings call (reg. req.)

Related articles:
Comcast lights Gig Ethernet for Maryland's Bethesda Green business incubator
Comcast Business boosts enterprise services with AWS connectivity to 1M Ethernet-enabled buildings
Comcast Business dedicates $1.2M to extend fiber, Ethernet to Bellevue, Wash. office parks
Comcast Business surpasses $5B revenue run rate, sees growing traction in enterprise segment

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