Metro Ethernet, backhaul revenues up 42% for Comcast

Comcast Corp.’s (CMCSK) Business Services grew a whopping 41.7% year over year to $435 million, driven by its metro Ethernet business and mobile cellular backhaul business. The cable company is planning to add 20 major markets to its metro Ethernet business in the future, said CEO Brian Roberts during its second-quarter earnings conference call.
The company counted revenues of $435 million from its Business Services unit, up nearly 42% compared to the second quarter of 2010. The company continues to invest in the division, said Neil Smit, president of Comcast Cable Communications. The company counted $44 million of capital expenses in the division. Total revenue for the quarter grew more than 50% due to the acquisition of NBC Universal to $14.3 billion. Net income was just over $1 billion for the quarter.
Going forward, Smit said that metro Ethernet and cellular backhaul will be solid drivers for the company in 2012 and beyond.
Comcast owns 147,000 fiber route miles, making it the largest facilities-based alternative to the phone companies, said Martha Tate, division VP for the enterprise sales channel at Comcast. The company targets small and medium-sized businesses with four metro Ethernet services, designed to deliver scalable high-performance point-to-point and point-to-multipoint connectivity.
Backhaul growth
In addition, wireless operators use Comcast’s fiber for mobile backhaul, a business that is estimated to grow to a nearly $9 billion in worldwide revenues by 2015, according to Dell’Oro Group.
“We’re at the initial stage of the mobile broadband wave with only a few LTE deployments underway. As radio access networks across the globe get upgraded to newer mobile radio technologies like 4G LTE, availability of sufficient backhaul capacity will be a key enabler to customer experience. Our latest report indicates high-capacity optical and microwave deployments will have to maintain a growth curve to deliver the requisite backhaul capacity through 2015,” said Jimmy Yu, senior director of Optical and Microwave research at Dell’Oro Group.
“Our research has found that operators around the world are concerned with the rate of mobile traffic growth and are transitioning to Internet Protocol (IP) technologies to build a more efficient and scalable backhaul network. Our latest report forecasts the demand for IP-based routers and switches will continue to grow through 2015, almost doubling the market size of the router and switches segment in the five-year forecast period,” said Shin Umeda, VP of routers research at Dell’Oro Group.