Despite the relatively mature smartphone market, the majority of U.S. telecom operators were able to sustain year-to-year wireless revenue growth in 4Q22. Though inflation is limiting discretionary spending, operators are withstanding these pressures as wireless connectivity remains essential to most consumer and business customers. However, operators are being impacted by certain customers seeking lower-priced service plans to accommodate their tighter budgets, which is spurring operators to introduce new entry-level service plans, such as Verizon’s Welcome Unlimited plan.

 
Continued subscriber additions remained a main driver of wireless revenue growth. Connection growth among businesses is a predominant source of subscriber additions as companies are providing employees corporate lines and devices to accommodate hybrid work environments as well for security reasons, such as keeping corporate data and applications separate from employees’ personal devices.
 
Connected devices are also helping to drive subscriber growth, especially in areas including wearables such as the Apple Watch as well as connected car, which is generating millions of new quarterly connections for AT&T. Fixed wireless access (FWA) has also become a more predominant source of connection growth as T-Mobile’s and Verizon’s FWA services continue to outperform cablecos and other broadband providers in subscriber additions as the cost savings offered by FWA are appealing to customers amid inflationary pressures.
 
In addition to continued subscriber growth, higher average revenue per user (ARPU) is a significant driver of wireless revenue growth for U.S. operators, as a result of customers migrating to premium unlimited data plans to take advantage of incentives including subscriptions to video and music streaming services, 5G coverage without throttling limits, and increased high-speed mobile hotspot data allotments. ARPU is also benefiting from increasing international roaming revenue as travel activity gradually returns to pre-pandemic levels.

To learn more about the go-to-market and operational strategic shifts of U.S. operators amid inflationary pressures, watch our recent webinar “Competitive Landscape Shifts: Key Trends Impacting the U.S. Wireless Market” for free now

For prime contractors, managing an ecosystem of subcontractors is a constant challenge. These challenges are prompting vendors to reevaluate their subcontractor ecosystem strategies, driving change in the makeup of subcontractor ecosystems as well as the approaches used to manage partners.

 
The Fiber Optic Association (FOA) predicts that the number of homes in the U.S. passed by fiber networks will increase from 68 million in 2022 to 137 million by 2026. The cost and timeline of fiber network rollouts are largely predicated on the labor associated with network construction and deployment; 60% to 80% of the costs of a fiber network stem from labor activities.
 
Fiber network rollouts are large, complex and long projects. They are often nationwide in scope and require a diversity of technical skills at different times and for different durations. Telecommunications operators often hire prime contractors such as Tier 1 engineering, procurement and construction (EPC) firms or telecom OEMs to build their fiber network. However, given the scope and scale of these projects, even the largest EPC firms and OEMs must rely on an integrated and orchestrated ecosystem of subcontractors, product providers and other partners to successfully execute projects. For example, it has been reported that AT&T works with 700-plus contractors, while Google Fiber used approximately 50 subcontractors to build its network in San Antonio and Austin, Texas.
 
For prime contractors, managing an ecosystem of subcontractors is a constant challenge. Some of the pain points prime contractors face include:

• Finding qualified subcontractors amid labor shortages and a declining telecom workforce
• Competing with peers for subcontractors
• Managing subcontractors on projects (e.g., coordinating delivery timelines, reporting, enforcing quality assurance procedures, handling payments)
• Addressing subcontractor issues in the field with the client and/or local municipalities
• Building a supplier management function

 
These challenges are prompting vendors to reevaluate their subcontractor ecosystem strategies, driving change in the makeup of subcontractor ecosystems as well as the approaches used to manage partners. Some of these changes we’re tracking for 2023 and beyond include:

• Emergence of new commercial models to appeal to subcontractors
• Fluctuation in subcontractor rates and unit pricing to overcome supply shortages
• Increased emphasis on technology adoption to help manage and orchestrate suppliers
• Emergence of new sourcing models such as crowdsourcing
• Innovation, including automation of service delivery tasks across the program life cycle to reduce overall dependence on subcontractors and other laborers
• Vertical integration of suppliers

To learn more about how vendor ecosystems in network service deployment are evolving, watch our recent webinar “Optimizing for Telecom Network Deployment Services Opportunity in 2023 and Beyond” for free now

A select group of industry analysts gathered at the Comcast Technology Center in Philadelphia in March 2023 to hear from Comcast Business leaders about the company’s progress and success around its network and technology capabilities, go-to-market strategies and emerging portfolio segments. The event included a state-of-the-business update from Bill Stemper (president of Comcast Business) and Dave Watson (president and CEO of Comcast Cable), and an update on Comcast’s consolidated business performance from Brian Roberts (chairman and CEO of Comcast Corp.), as well as presentations focused on areas including the Masergy acquisition, portfolio strategies, customer case studies and security. The event also included roundtable sessions in which analysts participated in detailed discussions with Comcast Business executives around specific business areas.

TBR Perspective

The 2023 Comcast Business Analyst Conference showcased the company’s significant progress since its last on-site analyst conference held in September 2019. The event highlighted the company’s evolution from primarily serving local small businesses with traditional connectivity solutions during its infancy to its current ambition of competing as a leading global provider of secure networking solutions, supported by the Masergy acquisition and Comcast Business’ burgeoning enterprise business.
 
TBR believes Comcast Business is steadily gaining market share from rival service providers, as the company grew its annual revenue to approximately $10 billion in 2022 and its customer base to over 2.5 million customers. Unlike its largest competitors, AT&T, Verizon and Lumen Technologies, Comcast Business is not challenged by customer erosion from legacy network solutions as the company continues to enhance its hybrid-fiber-coax (HFC) network, including through the implementation of DOCSIS 4.0 technology over the next several years. Comcast Business is also targeting growth through its Masergy acquisition and adjacent solutions in areas including mobility, SD-WAN, unified communications, security and IoT, and multiple executives reiterated during the event the company has the potential to take up to $80 billion (including in off-net markets) in market share from its rivals.
 
Comcast Business faces challenges, however, that will limit the company’s market share. These challenges include competitors that are expanding their fiber networks, the growing availability and adoption of fixed wireless access (FWA) services, and businesses implementing 5G private cellular networks independently or with competitors.

Impact and Opportunities

Comcast Business Advances Enterprise and Midmarket Opportunity Via Masergy Acquisition

Comcast Business is expanding its footprint among enterprises and midmarket businesses through its Masergy acquisition, in which Comcast inherited Masergy’s existing base of about 1,400 customers in 100 countries. The Masergy purchase builds on prior acquisitions including Deep Blue Communications, Blueface and BluVector, and has enabled Comcast Business to strengthen its managed services portfolio in areas including SD-WAN, Unified Communications as a Service (UCaaS), security, and Call Center as a Service (CCaaS). The acquisition is also providing significant cross-selling opportunities, especially among U.S.-based companies with multinational operations, as Comcast’s network provides a strong backbone to support Masergy’s portfolio. The Masergy acquisition has significantly expanded Comcast Business’ distribution channels as Masergy leverages indirect channel partners for about 90% of sales, whereas Comcast Business has historically leveraged its direct sales channels for about 90% of sales and its indirect channels partners for the remaining 10% of sales.
 
The Masergy acquisition, which closed in October 2021, was timely for Comcast Business as it enabled the company to more effectively capitalize on the transition to distributed workforces spurred by the pandemic. To support hybrid work environments, Comcast Business is leveraging Masergy’s portfolio in areas including unified communications and SD-WAN solutions, augmenting its existing remote work solutions such as Comcast Business at Home, which offers enterprise-grade in-home connectivity solutions that are billed to employers. Additionally, Masergy’s robust cybersecurity capabilities, which are supported by its Fortinet partnership, help reassure Comcast Business clients as their organizations implement SASE (Secure Access Service Edge) network architecture to safeguard their distributed workforces.

Comcast Business Will Enhance its Network Capabilities as it Transitions to DOCSIS 4.0

Broadband services remain at the core of Comcast Business’ strategy due to all companies’ essential need for internet access, which in turn provides Comcast Business with the opportunity to upsell and bundle adjacent services such as SD-WAN. Comcast is in the early stages of its current network evolution strategy, dubbed the Xfinity 10G Network, which includes the transition to DOCSIS 4.0 technology beginning in 2H23 in initial markets to enable symmetrical, multigig speeds. Comcast expects to expand DOCSIS 4.0 availability to reach 50 million homes and businesses by the end of 2025.
 
The move to DOCSIS 4.0 technology will enable Comcast Business to optimize service quality as data usage continues to escalate and will support clients as more companies implement advanced technologies that require higher bandwidth and lower latency, such as AR/VR, AI and machine learning, to transform their businesses over the next several years. The move to DOCSIS 4.0 also entails Comcast furthering its implementation of virtualized network technologies, including the deployment of a virtual cable model termination system (vCMTS), which will provide internal cost savings and enable Comcast to more easily implement the latest software solutions and more quickly respond to customer service disruptions.
 
Comcast Business will face competitive challenges from rivals including AT&T, Lumen and Verizon, all of which are expanding their fiber footprints aided in part by government stimulus. Though TBR believes Comcast Business’ current network capabilities will be sufficient to compete against rivals’ multigig fiber offerings for most customers, Comcast Business could face potential disruption from competitors launching aggressive promotional pricing offers in tandem with their fiber rollouts. Comcast Business is also facing competition from FWA providers, though to a lesser extent compared to Comcast’s residential business.
 
TBR believes the greatest disruption from business FWA services providers is occurring among small businesses, which are seeking to reduce connectivity expenses, as well as companies that need to quickly launch new branch locations as FWA is quicker to install compared to fixed broadband. TBR believes FWA disruption is less prevalent among larger enterprises due to their more stringent network requirements and service-level agreements, though many companies have begun deploying FWA as a backup failover solution in case their primary fixed broadband connections are disrupted.

Comcast Business Positions for Growth in the Wireless Market

Comcast Business is positioning to support its clients’ wireless needs, including through the launch of Comcast Business Mobile in July 2021. TBR believes the offering is gaining traction due to its competitive price points as well as its ability to enable businesses to enroll in wireline and wireless services from the same provider. Comcast Business Mobile is also helping to accommodate businesses as they shift from fixed voice services to using wireless voice services exclusively. Comcast Business Mobile availability is currently limited to small businesses that have a maximum of 20 lines. TBR believes expanding Comcast Business Mobile to midmarket and enterprise customers would help the company further its traction within these segments as rivals including AT&T and Verizon remain entrenched in certain larger clients due to their ability to combine wireline and mobility solutions as part of clients’ contracts.
 
Private cellular networks are an emerging segment for Comcast Business as the company has deployed these networks at initial locations including the Wells Fargo Center and the Arlen Specter US Squash Center in Philadelphia; and the Sonoma County Fairgrounds in Santa Rosa, Calif.; and the Sound Hotel Seattle Belltown. Though Comcast expects fixed broadband connectivity paired with Wi-Fi will remain sufficient for most use cases in the foreseeable future, leveraging private cellular networks will enable Comcast Business to tailor its solutions to clients’ needs and position the company to support advanced solutions in areas such as IoT and computer vision that are more suitable for 5G.
 
Comcast Business also briefly discussed the opportunity the edge computing market provides, though the company has yet to announce a commercial offering within the segment. TBR believes Comcast’s vast real estate footprint, including its central offices, would provide a strong foundation for Comcast Business to compete in the edge computing market, though establishing partnerships with hyperscalers such as Amazon Web Services, Microsoft Azure and Google Cloud would be vital due to their foothold and technology advantages within the market.

Conclusion

Comcast Business is well positioned to sustain revenue growth over the next several years through its core broadband services, growing portfolio of value-added services, and cross-selling opportunities provided by the Masergy acquisition. Creating a stickier ecosystem through adjacent services such as Comcast Business Mobile and SD-WAN will help the company retain its core base of business broadband subscribers as it faces competitive pressures from rivals’ fiber, FWA and private cellular network offerings. Additionally, by advancing its network capabilities via DOCSIS 4.0 as well as its foray into 5G private cellular networks, Comcast Business will position itself to retain clients long-term as they seek to support next-generation use cases and applications.
 

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In February 2023 TBR surveyed its client service teams on the state of competitive and market intelligence in 2023. One megatrend stood out in those results — change.

Change comes in many forms. At the highest level, changes within the markets companies play in place new burdens on the type and volume of intelligence. Teams, budgets and organizational structures change constantly. Change can also be its own challenge; markets and teams change, but the need for CI/MI and the deliverables that CI/MI professionals create does not change.

Change typically requires the most precious resource CI/MI professionals have — time. Time is under constant pressure, as CI/MI professionals are asked to do more with less. In many recent cases, this even means doing CI/MI without the benefit of a shared and centralized budget, resources and leadership structure.

As changes continue to disrupt the profession, CI/MI teams and professionals will increasingly look outside for help. They will seek out technologies, third-party analyst and research firms, and other tools that can help them automate and optimize CI/MI and free up available time for the most high-value, impactful projects.
 

Top 10 Impacts for Competitive and Market Intelligence Professionals in 2023

1. Ecosystems of Competition

Demand for CI/MI continues to grow because markets are becoming more competitive. They are not just crowding with small, ankle biter competitors, either. Markets are converging and overlapping, and major established technology vendors are encroaching on each other’s territory. This creates an ecosystem dynamic in CI/MI for technology firms, in which vendors need to not only track their usual suspects but also assess how the broader ecosystem is forming in the area(s) they play in.

2. CI/MI Professionals Taking on More Responsibilities

This is the one that most CI/MI professionals have figuratively, if not literally, tattooed on themselves. CI/MI teams are always being asked to provide more resources, answers, assets and support with less time, budget and people. CI/MI professionals must ruthlessly prioritize projects to focus on the greatest areas of impact, lean heavily on third parties for support, and find new ways to activate competitive and market intelligence via self-service, often enabled by technology. In many cases, CI/MI is becoming the full or partial responsibility of business unit or other resources such as product managers, marketers, strategy leaders, and sales enablement, strategy and operations teams.

3. Staying the Course

Most CI/MI teams are staying the course for 2023 in terms of their team size, structure and deliverables, despite tech sector and macroeconomic headwinds. If anything, as we said above, they are being asked to do more with the same — or less — resources. For many, CI/MI has become an established mechanism that supports deal pursuits and development of products and services. Making major functional or strategic changes to CI/MI would require eliminating the systems that have been developed to support deal win rates and the other key KPIs that are attributable to CI/MI outcomes.

4. Core Deliverables Matter

We have not seen much change in how competitive intelligence is being translated into core deliverables. Competitive battlecards, profiles, benchmarks and newsletters remain common tools to deliver intelligence. Where dividing lines exist is around CI/MI maturity. We find that many less mature organizations are more reactive, request-driven and ad hoc in their approach to deliverables, whereas established programs at larger companies have created embedded programmatic CI/Mi deliverables.

5. Live where stakeholders live

Just as core deliverables have not changed much for CI/MI leaders, neither have the methods in which stakeholders seek to consume intelligence. This is suggested by the deliverables themselves. Email remains the most popular way in which to get competitive updates, and newsletters continue to be a popular deliverable for CI/MI teams. The big lesson for CI/MI teams is to take a stakeholder-led approach. Understand what they want and where they want it, and create resources that support that.

6. Specialization Everywhere

We believe specialization is going to define the future of CI/MI for practitioners at technology companies and the research firms, agencies, and other types of service providers that support them. In this research, we found no material changes happening in how companies are using third-party research vendors. CI/MI programs still rely heavily on analysts and other providers to augment their internal staff. However, sophisticated programs increasingly demand specialization around the market areas, customer segments, topics and/or services they care most about. As technology tools elevate the baseline of CI/MI, those organizations and providers that can provide specialization via access to nonpublic, direct-from-market data and insights will stand to win.

7. Small Teams

Even at the largest global technology organizations, CI/MI teams are typically fewer than 10 FTEs, and often fewer than five. In our surveys, we did not see any indications that companies plan to substantively grow or shrink their teams in 2023. This is why establishing specialized partnerships with research providers and analyst firms is so important; they are a lifeline for time-and-resource-strapped internal teams. This trend also underpins the importance of building a culture of self-service and all-hands-on-deck CI/MI.

8. Empowering Self-service

Self-service is the foundation of all small CI/MI programs and increasingly a priority for larger teams at bigger vendors. Through CI platforms like Crayon and Klue, solo CI/MI professionals can establish a baseline program and deliverable assets and activate through self-service, freeing up their time to respond to ad hoc field requests versus build standard deliverables. At larger organizations, the trend is to move in a similar direction where possible. A key challenge we have heard from CI/MI teams is how to design (and reinforce) systems to make sure that stakeholders know exactly where and how to collect the self-service resources they require.

9. Manage Centrally; Empower Everyone

The best CI/MI programs at organizations of all sizes focus on building a CI/MI  sharing culture. Having the full support of an organization collecting and disseminating intelligence and insights can greatly amplify the resources of the core team. We have seen great examples of how companies are using Slack, lunch-and-learn meetings, and other similar vehicles to promote CI/MI wins outside of the centralized CI/MI organization. There is a catch, however: This type of strategy does not eliminate the need for a centralized and dedicated CI/MI team. A central team is necessary to quarterback the process, provide a baseline program of assets and resources, and be available for ad hoc requests and questions.

10. Technology Enables but Does Not Replace

The emergence of CI platforms is probably the biggest technology disruption in CI/MI, but there are others on the horizon. Just as tools are being built for marketers that leverage OpenAI’s ChatGPT and other functionalities, a new crop of AI tools will emerge for CI/MI use cases. For example, in 2022 a new startup named 1up emerged, billing itself as “the competitive AI.” Others will follow suit. While these types of tools will automate how publicly available intelligence can be gathered and distributed, they are unlikely to replace intelligence methods such as win/loss interviews or unseat industry and/or sector specialized analysts with nonpublic data and insights. These tools promise to enable CI/MI through efficiencies but will not replace CI/MI roles and services providers. Rather, they will create more demand for unique, differentiated and specialized intelligence.