Cablecos & The Channel: State of the Cable Market Survey New Findings in 2019

Cablecos continue to grow with gigabit internet services and new SD-WAN products, with plans for security and other managed services. And channel partners appreciate recent intentions by cable providers to improve their channel presence and processes. Those are some of the findings from our ninth annual State of the Market Survey.

Other trends revealed: While channel partners continue to perceive cable as a business-class provider of connectivity, their perceptions of cable as a primary carrier declined for the third straight year. And also for the third straight year, they chose access to human sales support as the most important channel program attribute.

In this article you can access the full results of our 2019 Cablecos & The Channel: State of the Market Survey and profiles of major cablecos. Find out:

• How the services and products of major interest to channel partners align with cableco development plans
• Where cablecos and channel partners are likely to find potential revenue growth
• What cableco channel program attributes partners value most — and which ones need improvement

Content Summary

Looking Beyond Connectivity
Cable Versus Telecoms
Perceptions of Partner Programs
The 2019 Respondent Profile
2019 Cable Provider Profiles
Altice Business
Comcast Business
Cox Business
Mediacom Business
Shaw Business
Spectrum Business, Spectrum Enterprise

s cable providers plan to sell more advanced services and extend product lines beyond their service territories, what types of demands will be put on them by their channel partners? Channel Partners’ ninth annual Cablecos & The Channel: State of the Cable Market survey provides clues as to what channel partners want from cable providers and how they think cable is doing so far. The 2019 survey comes amid cable’s continued growth with gigabit internet services, new SD-WAN products, efforts to provide more automated and human partner support, and plans for security and other managed services.

The survey, taken by respondents throughout the channel partners sales and distribution chain, shows increasing interest in SD-WAN (software-defined WAN) and potential for unified communications and security products. Partners increasingly favor access to multiple cablecos through one agent agreement, a capability that could come into play as cable providers seek to offer products out-of-footprint. Based upon survey data and respondent comments, channel partners appreciate recent intentions by cable providers to improve their channel presence and processes, but some complaints remain about fulfillment, installation and provisioning issues.

This report includes the survey results, including additional comments by some respondents, and profiles of major cablecos courtesy of CTAM (Cable & Telecommunications Association for Marketing).

Looking Beyond Connectivity

Internet connectivity has been job #1 for service providers and their channel partners. With broadband becoming as prevalent as electricity, the success of broadband also poses a challenge: As the marketplace becomes saturated, the overall rate of growth is starting to slow, according to some measures. Cable providers are seeking to provide higher speeds and broader product lines that meet a wider array of business customer demands.

For channel partners, cloud services and hosted VoIP/UC (unified communications) remain top drivers. Interest in SD-WAN is growing, from 13% in 2017 to 20% in 2019. Since SD-WAN is a replacement for MPLS for most businesses, it’s fitting that interest in MPLS declined from 6% to 2% over the past three years — from 5% to 2% in the past year alone. See Figure 1

Channel partners continue to perceive cable as a business-class provider of connectivity, including fiber, coax and Metro Ethernet services. Perceptions of cable’s voice services do not score as well, perhaps due to the established telephone company competition. Despite cable’s standing as a business-class provider of internet services, perceptions of cable as a primary carrier have declined over three years — from 62% in 2017 to 37% this year — which is perplexing. Cable providers generally would prefer to be perceived as primary, not secondary, carriers. See Figure 2

Managed services are considered a potential revenue growth area for cable and its partners. Currently, two-thirds of survey respondents said managed services comprise less than 40% of their average monthly sales, suggesting that there’s room to grow. Most of the major cable providers have said they intend to offer more managed services, most likely starting with security products, as well as virtual network functions (VNFs) for their enterprise-level virtual platforms. See Figure 3

While SMBs provide cable’s revenue foundation, providers have been seeking to move upmarket and attract large companies and multisite enterprises. About half of the respondents believe cable has been somewhat successful in its effort to move upmarket, although the amount saying cable has been extremely successful has declined over the past three years. The number saying cable has been somewhat or extremely unsuccessful remains small. See Figure 4

Similarly, the percentage saying cable has been successful in adding new products has declined slightly. However, when asked whether there are products that cablecos are not selling in their service areas, 79% said no, up from 63% two years ago. See Figure 5 and Figure 6

Which additional products would partners like to have in their services areas? In write-in answers by respondents, the leading product mentions were SD-WAN (six write-ins), UCaaS (four) and security (three). Eight respondents mentioned some form of connectivity, including fiber and fixed wireless. One said, “Customers need broadband outside of the cable footprint,” while another advocated for “overall connectivity to desired network services.”

When asked to select next-generation technologies that they could sell to their business customers, channel partners showed strong interest in SD-WAN and gigabit internet. Respondents also are intrigued by 5G mobile, which is only starting to emerge in the United States. Advanced security and the internet of things (IoT) rounded out the top five technologies of interest. The 2019 results are almost identical to the 2018 survey. See Figure 7

Many cable providers are offering gigabit internet service over existing coaxial connection by using DOCSIS 3.1 technology. Recently cable marketers have been calling the service “gigabit coax” to focus on what it provides rather than the technology behind it. When asked about their familiarity with gigabit coax, two-thirds said they were familiar, an increase from 59% last year. See Figure 8

Cable providers also are moving into the wireless arena with Comcast’s Xfinity Mobile, Charter’s Spectrum Mobile and a service by Altice USA planned this year. While these services are aimed primarily at the residential market, about one-third indicated they would be interested in a mobile business service. However, 38% said they were unsure and 28% said they are not interested, about the same as last year. See Figure 9

Respondents also expressed strong interest in 5G, with 74% saying they are extremely or somewhat likely to approach their customers with 5G services as they become available. 5G mobile and fixed broadband have been widely portrayed as a competitive threat to cable, but it also provides potential opportunities for cable providers to support 5G backhaul, utilize fixed 5G for broadband and offer small cells as a service. See Figure 10

Cable Versus Telecoms

Survey respondents were asked about the quality of cable services versus telecom providers. Cable continues to hold its own against the competition. When asked about the quality of network services and voice services, about three-quarters of respondents said cable is equal or better than telecom providers. The amount saying cable’s network services are somewhat poorer fell from 32% last year to 20% this year. The number saying cable voice services quality is somewhat better rose from 11% to 20% percent. See Figure 11 and Figure 12

To compare business and service attributes, respondents were asked to rank seven attributes that are important to them. The top three ranked attributes are: network quality, network availability/coverage, and services and support for the end customer. See Figure 13

For a majority of partners, cable continues to be viewed as offering a better price for the end customer than telecom providers, although the amount saying cable’s price is much better and somewhat better slipped to 58% this year from 70% last year. Cable’s network reliability rating went up to 29% from 21% last year. However, in this and related categories, the number of respondents who said cable is better essentially is matched by those who said it is poorer. See Figure 14

Perceptions of Partner Programs

When ranking the most important channel program attributes to their business, the top choice over the past three years is access to human sales support. Recently master agents and others in the sales chain have been seeking more automated tools from service providers to deliver fast and easy access for ordering and provisioning. Cable providers have been developing portals, dashboards and apps that provide quick access to information. While ease of ordering, provisioning and quoting continue to rank high, access to human sales support and in-person training still rank among the most important program attributes. Apparently partners still want a human touch.

Moving up in the rankings to the second spot is access to multiple cablecos through one agent agreement. That ability could become increasingly important as cable providers seek to offer products and services beyond their franchise territories in order to meet the needs of businesses and institutions that have facilities in multiple locations. Comcast Business and Spectrum Enterprise have both positioned their SD-WAN platforms for nationwide availability, meaning they are ready to work with other service providers out-offootprint. Cox Communications, Mediacom Communications and others also have signaled their interest in cross-territory sales and support. See Figure 15

Significantly more respondents this year said cable is doing “somewhat better” or is at least equal to telecom providers in providing ease of ordering, provisioning and quoting — and also in delivering commission to the partner. Only small amounts of respondents said cable is doing “much better.” See Figure 16

The 2019 Respondent Profile

Channel Partners surveyed its readership by using an online poll from January to April 2019 to ascertain channel partners’ perspective about selling cableco services to businesses. The survey was completed by 158 qualified respondents. Forty-one percent of the respondents identified themselves as an agent/subagent or master agent. See Figure 17

Channel partners routinely quote cable for business — and many expect to increase their monthly sales this year. The companies that they quote the most match the subscriber size and reach of the largest cable providers in the United States. See Figure 18

For one-fifth of the survey respondents, cable comprises more than 30% of their average monthly sales. The remaining 80% earn 30% or less from cable sales versus their other sales sources. See Figure 19

Many partners expect to see their sales increase over the next 12 months. For example, while 19% said cable currently represents 21- 30% of their monthly sales, 22% said they would earn that amount 12 months from now. The number stating 31-40% in sales increased from 6% of respondents to 10% predicting that level in the next 12 months. The 51-60% level of sales increased from 3% of respondents currently to 8% predicting that amount in 12 months. See Figure 20

In this year’s survey, 60% of the respondents are in partner companies with annual revenue of less than $5 million while 18% are in companies earning $50 million or more. Twenty-one percent are in companies with annual revenues between $5 million and $50 million. See Figure 21

More than half of the respondents are primarily focused on SMB customer targets. Thirty percent serve customers of all size while only 8% cited their primary targets as large businesses and multisite enterprises, two customer segments where cable is seeking to gain more traction. See Figure 22

The level of experience of partners selling cable continues to grow. This year 50% said they have been selling cable services for six years or more, the same level as last year’s survey. See Figure 23

The Canadian cable market continues to be important for many channel partners who work with Canadian providers, including Shaw Business and Rogers Business. Another cable provider, Cogeco Communications, recently spun off its Cogeco Peer 1 partner services in a stand-alone business acquired by investment firm Digital Colony.

More than one-third of survey respondent said they sell services to businesses located in Canada, although the percentage fell from previous years. The number saying they have agents in Canada grew slightly. The statistical variances may be due to differences in the makeup of the respondent base; Canadian cable clearly remains significant for many partners and agents. See Figure 24

2019 Cable Provider Profiles

Through CTAM, the major cable providers submitted the following profiles of their channel partner programs.

Altice Business

Company Description: Altice Business in the U.S. offers data, internet, voice, managed services and pay TV products and services to more than 375,000 small, medium and large-sized businesses, with a network that includes more than 19,000 fiber-lit locations in the United States. To meet our customers’ growing business needs, our 100% fiber-optic network delivers high-performance fixed and mobile connectivity across the globe.

Channel Leader: Mike Ocuto, Vice President of Sales

Date Established: 2007

Number of Indirect Sales Partners: Undisclosed

Geographic Territory Partners Can Sell Into: Twenty-one states across the U.S., including the greater New York metro area, including Manhattan.

Products Partners Can Sell: Phone, television and internet for any size business.

Phone service includes digital phone lines, business trunking (SIP and PRI) and toll-free.

Internet access products include premium tiers with speeds to meet the needs of all businesses

Internet service includes Optimum Wi-Fi.

Enterprise Level Services: Ethernet-based products from 20Mbps to 1,000Mbps; 1Gps to 100Gps optical transport services; voice services including toll-free, enterprise voice and hosted voice; managed Wi-Fi and managed DDoS

Comcast Business

Company Description: Comcast Business, a unit of Comcast Cable, provides advanced communication solutions to help organizations of all sizes meet their business objectives. Comcast Business has the largest IP network in the nation and offers fast, reliable Ethernet and internet connectivity, Wi-Fi, voice and TV solutions to help organizations of all sizes transform their business. Comcast Business SD-WAN is built on the carrier-grade ActiveCoreSM SDN platform and allows for better optimization of traffic across the network, centralized management and a reduction in the total cost of ownership by providing key networking functions in an integrated, intelligent solution. Powered by an advanced Gig-ready network and backed by 24/7 customer support, Comcast Business provides companies with the solutions they need to make their businesses more productive. The award-winning Comcast Business Solutions Provider Program is a comprehensive indirect channel program that enables partners to sell a full line of small and mid-market business products from Comcast. As a Comcast Business Solutions Provider, partners are able to diversify their portfolios and earn recurring commission while providing their customers with a valuable alternative to traditional telco carriers and aging MPLS services.

Channel Leader: Craig Schlagbaum, Vice President, Indirect Channels

Date established: 2011

Number of Indirect Sales Partners: The program launched with three national master agencies — Intelisys, Telarus and TBI. It now features 11 master agents and thousands of selling partners, and the program continues to grow at a significant pace.

Geographic Territory Partners Can Sell Into: 39 states and the District of Columbia

Products Partners Can Sell: Business Ethernet, Business Internet, Business Voice portfolio, Business TV, SD-WAN, Video Monitoring, Hospitality Solutions

Cox Business

Company Description: Cox Communications is a broadband communications and entertainment company providing advanced digital video, internet, telephone and Wi-Fi services over its own nationwide IP network. The third-largest U.S. cable TV company, Cox serves more than 6 million residences and businesses.

Cox is known for its pioneering efforts in cable telephone and commercial services, industry-leading customer care and its outstanding workplaces.

Channel Leader: John Muscarella, Senior Director of Alternate Channels

Date Established: Referral Agent program, July 2012; Selling Agent program, 2015

Number of Indirect Sales Partners: Cox Business has three authorized master agents — Intelisys, Sandler Partners and Telarus, approximately 90 authorized selling agents and more than 1,000 referral partners.

Geographic Territory Partners Can Sell Into: All Cox franchise areas

Products Partners Can Sell: All voice, data and video products

Mediacom Business

Company Description: Mediacom Business delivers internet, phone and TV services to businesses of all sizes. With a coast-to-coast fiber network, we offer anchor institutions bandwidth and connectivity with speeds of 10 gigabit and beyond. Our state-of-the-art national broadband network serves businesses in some 1,500 communities across 22 states.

Channel Leader: Jim Phipps, Vice President, Commercial Sales

Date Established: 2011

Number of Indirect Sales Partners: 45

Geographic Territory Partners Can Sell Into: Entire Mediacom Business footprint which includes 22 states with a significant customer base in the Midwest and Southeast.

Products Partners Can Sell: HFC suite of solutions (Business Internet speeds of 60, 100 and 200 Mbps and 1 Gbps; Business Phone including Managed Voice Solutions, Business TV & Music) and Gigabit+ Fiber Solutions, enterprise-level Ethernet services including Dedicated Internet Access, Transparent LAN, SIP/Primary Rate Interface.

Shaw Business

Company Description: Shaw Communications is one of the Big 4 Communications Companies in Canada. Think of us as Canada’s version of Comcast or Spectrum. One of the two major cable companies in the country, Shaw is a diversified communications and media company serving 3.3 million customers through a reliable and extensive coax and fiber network. We have roughly $9 billion in capital expenditure since 2000, building a world-class network. Shaw has invested roughly $88 million into our local communities over the last year. Shaw has ~14,000 employees and in 2018 was chosen as one of Canada’s Top 100 Employers, as well as one of Canada’s Best Diversity Employers.

Channel Leader: Rob Myatt, Vice President, Enterprise, Service Provider & Carrier Solutions

Date Established: Shaw’s Regional Partner Program was established in 2009 and their Master Agent Partner Program was established in 2014.

Number of Indirect Sales Partners: The Master Agent Program features seven master agents and thousands of selling partners, with the program continuing to grow at a significant pace.

Geographic Territory Partners Can Sell Into: Shaw offers coax, fiber and voice-based services across Western Canada (Alberta, British Columbia, Manitoba and Saskatchewan) and fiber-only services in Eastern Canada via a leased last mile while utilizing our nationwide fiber backbone. We are also on net at many of the Northern U.S.-based carrier hotels (Seattle, Chicago, New York, etc.).

Products Partners Can Sell: The company provides business customers with cable and fiber internet, data, SD-WAN, EOD (Ethernet Over DOCSIS), Wi-Fi, data center, TV and telephony solutions (SIP, PRI, POTS, hosted with Broadsoft).

Spectrum Business, Spectrum Enterprise

Company Description: Spectrum is a national provider of fiber- and coaxialbased technology solutions, serving over 25 million customers in 41 states. The Spectrum Partner Program provides best-in-class telecommunication services such as internet, voice, TV, data networking and cloud solutions to small, medium and enterprise-level customers.

Date Established: Spring 2010

Leadership: Michelle Kadlacek, Vice President, Enterprise Indirect Channel, and Chris Czekaj, Vice President, Strategic Channels, SMB

Number of Indirect Sales Partners: Numerous national master partners and thousands of active subagents

Geographic Territory Partners Can Sell Into: 41 states across the U.S.

Products Partners Can Sell: Partners have access to enterprise solutions (fiber internet access, Ethernet, trunking, hosted communications, managed services and cloud) and SMB solutions (phone, internet and TV).

Source: Channel Partners