Cable's threat to the incumbent service providers' business service play may be a relatively new phenomenon, but to Cox Business, providing business services and wholesale bandwidth services is old hat. The now independent cable MSO has been delivering business services for about 15 years, since it started selling wholesale local fiber bandwidth connections to IXCs. And while Cox Business has seen the obvious economic slowdowns, the service provider reports strong demand for its enterprise and wholesale network services. Fierce Telecom recently caught up with Kristine Faulkner, Cox Business, vice president of product development, to talk about how Cox Business is being sought ought by both SMBs and larger businesses as a viable service provider alternative.
FierceTelecom: In their Q2 earnings reports, a majority of U.S. and European service providers cited the slowdown in business service spending as their biggest challenge. Is that having impact at all on Cox Business?
Faulkner: I say naturally we're not immune to some of the economic pressures we're encountering nationally. I would say we are fortunate, because at a time when traditional legacy carriers are experiencing single digit declines in growth not only in their enterprise markets, but also in their SMB segments, the cable industry is seeing anywhere from 15 percent, or in Comcast's case, 51 percent year-over-year growth. Cox is within those ranges. We're in the mid to high teens.
We have seen some impact, especially in those markets that have been hit hard with unemployment, but overall our growth remains fairly strong. If anything, I think the economic pressures have been driving SMBs to shop. That always makes us happy because every customer we get is typically someone else's customer. Our overall growth remains strong. If anything, once they do start shopping, we are a natural alternative. We see things like a business reducing the amount of lines they take or realizing they don't need two fax lines. Overall we're not immune, but growth is strong.
FierceTelecom: During the recent quarter, Cox completed fiber network extensions to the i/o data center's Phoenix one facility. How significant was that connection and will it provide customers with more network diversity?
Faulkner: I think that connection in particular is an example of how we're strategically building out our footprint with fiber in particular. You may have seen a similar announcement we made in Las Vegas where we also built out a similar data center. If you look at this country, we're proactively building out to areas of concentration that maybe we don't serve today or that are unique opportunities for us.
We're committed to expanding out footprint for both retail and wholesale opportunities. Connectivity to these large data centers positions us very well as we look at our wholesale opportunity and selling last mile access to the carriers. The distinct differentiation is we are truly a wholly-owned operated alternative, unlike others that are leasing network and serving as an alternative. That enables us to serve as a primary connection, or in cases where carriers are looking for redundancy, we can supply that connection because we're not leasing from other carriers.
FierceTelecom: You mentioned wholesale. What are the hot topics for wholesale services? Is it IP connections for other carriers or wireless backhaul?
Faulkner: Wireless backhaul is clearly driving a lot of the growth there, but realize we have been at that game for about 15 years. Cox Business really started out in the market by serving as a last mile provider to the IXCs in our fiber-rich areas. That business continues to be strong, but with the merger activity means that it's not growing quite as fast. What is more than making up for it is the growth in wireless backhaul. As we look at wholesale, the growth in wireless backhaul is distinctly the driver.
This interview is continued here