How telcos can tap into the smart home opportunity
WHEN you think of smart homes, you think of a network of connected devices that transform your home to make it more comfortable and convenient.
It enables you to use your voice or your smartphone to command appliances and pre-program them to be triggered by certain events. And all of it is usually done through the wifi-connection you have at home.
However, there’s a significant opportunity for telecos who can create platform-based smart home solutions, striking up partnerships with leading device makers or rolling out their own devices that take the pressure (and hassles) off the home wifi network.
Telcos, or communication service providers (CSPs), can help drive the growth of smart home adoption by building smart home offerings alongside their investments and deployments of broadband and video services.
However, more recently, most telcos have been outperformed by aggressive competition and are now at a crucial stage: They must accelerate their foray into activities beyond their traditional offerings to foster revenue growth.
One of those activities that seem to be providing significant growth is the smart home solution market.
According to ABI Research, the opportunities for CSPs in the smart home market will reach US$11.2 billion by 2022, “though it will not be an easy journey”.
To win the smart home, CSPs must take a platform approach, as done by Deutsche Telekom or Comcast in other parts of the world.
— DeutscheTelekomGroup (@Telekom_group) April 4, 2016
A platform strategy must be supported by creating a wide partner ecosystem and be underpinned by an innovative monetization approach favoring “freemium” services over traditional bundles.
CSPs have assets all around the connected home from providing connectivity, creating content and delivering video, to specific applications such as monitored security. Therefore, they have a wider reach than any other competitor.
“CSPs should use this mix of essential (e.g., broadband connectivity) and value-added services (e.g., monitored security) to tailor a strategy fine-tuned to customers’ needs and regional dynamics. CSPs should not impose their legacy fixed-line business model to the smart home,” ABI Research Senior Analyst Pablo Tomasi said.
CSPs are being threatened in a market increasingly driven by the likes of Google and Amazon with a range of products and services from AI-powered smart home voice control smart speakers to security solutions. In order for them to survive, this is the perfect time to build smart home solution bundles through partners and vendors.