The top 20 cable operators are ramping up to grab a slice of the lucrative small business phone market, a move that could cost incumbent phone companies more than four billion dollars over the next five years, says a new market research report from Insight Research Corp.

Incumbent phone companies are expected to loose more than 1.5 million small business phone lines to cable competitors by the close of 2007 alone, and nearly 10 million small business phone lines over the next five years, according to the new research study.

According to Insight's newly-released market analysis report, "Cable Telephony: The Threat to Small Enterprise ILEC Markets 2007-2012," fierce competition-long a hallmark of MSOs and phone companies that provide residential telephone and broadband data services-is now spilling over in the small business market. On a per-customer basis, the revenue associated with providing a small business with data and voice services can generate three to four times the revenue of the residential customer buying a bundle of voice, data, and video services, which makes the competition for these customers all the more turbulent.

"Recent announcements by Comcast and Time Warner Cable make it plain that the small enterprise is the next battleground in the cable versus phone company fight," says Robert Rosenberg, President of Insight.

"We looked at the 20 largest cable operators that together have within their operating footprints about 6.5 million out of more than seven million small businesses in the US. MSOs such as Comcast, Cox, and CableVision have the offers and the reach, and they are going to have a definitive impact on phone companies' bottom line over the next few years," Rosenberg concludes.