The smart home: the 5th Beatle of operator services
Remember back in the day when your house – if you were lucky – only had a telephone? I still remember proudly answering that clunky piece of Bakelite: “Bledlow Ridge, 510”, using town names rather than area codes. That’s when telephone operators were just telephone operators.
But no longer. In fact it’s been a long time since operators offered just one thing. Fixed telephony, internet, IPTV and mobile have given operators a “fab four” of services. And today we stand on the cusp of operators becoming quintuple-play service providers: voice plus data plus TV plus mobile plus…. plus what? What’s the standout contender for becoming the 5th Beatle of operator services?
The smart money (well, mine at least) is on the smart home, and some operators have already taken the plunge. While the market is still young, the growth forecasts for it are huge: CAGR (Compound Annual Growth Rate ) of 24% between 2015 and 2020 and revenues of $39 billion by 2020 according to ABI Research1. And operators have 4 key advantages to help them capture a generous slice of the smart home pie.
Firstly, one thing often cited as a barrier to adopting smart home services is the need for a dedicated hub to connect and control all the smart home devices. But operators already have a box inside the home. The broadband residential gateway or CPE can be the smart home hub, so customers don’t have to add yet another box to their homes.
Secondly, the smart home generates a lot of data, some of which can be pretty personal (think of security applications that know when you’re home, whether doors are unlocked or alarms are enabled). Operators have been trusted for years to manage and protect their customers’ call and internet data as well as personal billing information.
Thirdly, if you’re trying to set up your smart home and it’s not going well, who ya gonna call? Operators already have contact centers in place to take new requests and provide remote technical support, as well as experienced field technicians for on-site installations and troubleshooting.
And finally, an operator’s installed base is a ready-made market. Customers are always after more value and operators have a long history of providing it. Bundled services help customers save money and save the inconvenience of going to different vendors for different services. As interest increases for the smart home (security and energy management are the early contenders for monetization) operators will be a natural choice of provider.
So when you add it all up, it seems kind of obvious. The only difficulty, just as with the Beatles, would be deciding which of the quintuple-play services is your favorite.
1 ABI Research, Home Automation Systems, December 2015
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