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Comcast Corp. said it would start selling Internet and phone services to large businesses nationwide, even those located outside its service area, as it seeks to steal away more customers from telecom providers like AT&T Inc. and Verizon Communications Inc.

The cable giant unveiled plans Wednesday to create a new unit to offer data services to Fortune 1000 businesses across the country, including those located in other cable companies' territories. Comcast said it has struck wholesale agreements with cable operators including Cox Communications Inc., Time Warner Cable Inc., Charter Communications Inc., Cablevision Systems Corp. and Mediacom Communications Corp., to offer services using their pipes.

Comcast says it is seeking to bring together the cable industry to provide a meaningful alternative to AT&T and Verizon, the longtime incumbents in the market for selling network services to businesses. Because cable companies are regional by nature, they haven't been able to offer one-stop-shop, nationwide offerings for big enterprises. "Sometimes, [big businesses] would just eliminate us" when choosing a provider, said Bill Stemper, president of Comcast Business.

Through these new wholesale arrangements, Comcast hopes that a bank with locations outside of Comcast's service area, for instance, can still sign up with Comcast and receive service at all its locations. Comcast would pay wholesale fees to other operators to service business locations outside of Comcast's footprint. To help manage national accounts, Comcast said it acquired a company called Contingent Network Services two weeks ago.

The move sets up Comcast to potentially compete with other cable operators for business customers, threatening the longtime status quo in the cable industry, where operators historically haven't competed with each other for customers in the same geographic areas. But Mr. Stemper believes there will only be "edge cases" where Comcast ends up competing for the same customer as another cable operator. He said that businesses naturally will align with the operator that makes the most sense with where their branches are located.

"We don't view it as new competition," said Todd Smith, a spokesman for Atlanta-based Cox Communications Inc. If a business picked Comcast's solution but had branches in Cox territory, "it's still revenue for us," he noted, whereas if the business went with a nationwide phone company like AT&T, it could cut out Cox completely.

Cable executives said Comcast's plan is an extension of what's gone on at a local level for years—where operators have sold wholesale network capacity to other operators so they can serve a business client's far-flung branches. "I'd look at it as a positive, that we might be getting more customers that…haven't chosen us before," said Tom Larsen, senior vice president of government and public relations at cable operator Mediacom Communications Corp.

Comcast is expanding its business-services division as it contends with pressure in its core pay-television business. Business services have become one of cable operators' fastest-growing divisions as video subscriber losses have mounted. Last year, Comcast's business-services division generated about $4 billion in revenue, up 22% compared with the year earlier. Mr. Stemper said the total market opportunity nationwide for Comcast to sell data services to businesses could be about $40 billion.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

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(END) Dow Jones Newswires

September 16, 2015 04:25 ET (08:25 GMT)

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