April 1, 2009

Cox Business to Propel Revenue Growth

Cox Communications is counting on its business unit in a big way. Cox Business is shooting for $1 billion in annual revenue by 2010.

"We're going to come fairly close to that this year," said Cox Business VP Phil Meeks, who's been heading up this unit within the company since July 2008. "We're on track for 16 percent growth this year after 16.5 percent growth last year."

Cox Business is expected to generate 26 percent of Cox Communications' growth over the next three years, said Meeks, who outlined some key strategies to reach that goal in an interview with CT on the first day of the Cable Show in Washington, D.C.

Four-fold strategy

First, the company is expanding its physical network. Meeks said the business unit looks for "clusters of opportunities" such as dense office parks and multi-unit, high-rise buildings.

Cox Business is targeting its network expansions in a select group of its 18 systems. "We're focused on driving capital investment dollars in four key markets: northern Virginia, San Diego, Las Vegas and Phoenix," said Meeks.

Secondly, Cox wants to sell more products to its existing customers. Meeks said the unit's bread and butter is very small-to-medium businesses (VSMBs) of 19 employees or fewer. "Seventy-five to 80 percent of our customers are in that space," he said.

"Most of our customers are single product data customers," he added. Cox wants to bundle business voice and video to those customers as well.

The company has a good start in voice with 600,000 business phone lines in place already. (For a look at how Cox views SIP trunking as an enabler of business voice opportunities, click here.)

Besides selling more products to existing customers, Cox also plans to repurpose its existing HFC legacy plant to serve SMBs with 20-99 employees. Meeks said the technology is available for transporting PRI (primary line interface) traffic over coaxial cable, the physical medium that passes 80 percent of the SMBs in the Cox footprint.

Finally, Cox sees opportunity in the wholesale market, as wireless providers move to next generation architectures - 3G and 4G - and need bigger pipes.

Big picture

As for larger customers, Cox has focused on the healthcare, education, hospitality and government vertical markets. With its data and voice services, Cox leads MSOs in business Ethernet. (For more, click here.)

Cox executives are slated to discuss the capabilities of its infrastructure to deliver telemedicine applications at the Cable Show's Broadband Nation exhibit this evening.

Despite the economic downturn, Cox is bullish. "We're not the low-cost provider typically," Meeks said. "(But) we're helping our customers by lowering their overall technology spend."

- Linda Hardesty

Read more news and analysis on Communications Technology's Web site at www.cable360.net/ct/news/.