Natasha Tamaskar serves as Vice President, Global Marketing and Sales Strategy for Radisys.
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The global broadband market remains strong, estimated to reach $326 billion globally by 2024, according to the OMDIA report “The Future Telco-Connected Home.” Yet, despite the strong forecast, service providers are searching for additional ways to broaden the utility of data plans in order to retain and increase market share. As a disclosure, my company Radisys is a global leader in open telecom solutions, delivering full lifecycle support to help service providers build and operate networks.
Smart living solutions complement operator broadband portfolios with life-enriching home automation capabilities that boost data usage and present new revenue opportunities for service providers to differentiate their offerings. As a result, smart living solutions allow service providers to capture more subscriber spending while delivering unmatched subscriber experiences.
The Rise In Smart Device Usage And Variety
According to the OMDIA report, the number of installed connected devices doubled to 13.4 billion between 2015 to 2020 and is expected to grow another 70% by 2025. By offering smart living solutions such as security and surveillance, home automation and energy management for customers to complement their broadband plans, service providers can increase the average revenue per user (ARPU) while also monetizing these services to gain new revenue streams.
While smart living solutions have been available for some time, many of them are tied to services offered by hyperscalers or over-the-top vendors. Services such as video doorbells or video surveillance cameras utilize broadband service providers’ bandwidth, with the end-user giving little to no thought about the value they receive from their plan provider. Smart living services, especially in home security, can provide new opportunities for service providers to leverage their embedded customer base to disrupt current OTT advances in customers’ homes.
Natural Strength Drives Disruption
One major advantage for service providers is that smart living solutions leverage operators’ natural strengths in mobile data, cloud storage and data security. Many of the big service providers in the U.S. have begun offering smart living solutions as add-on packages for their broadband plans.
Given their size, tier-one service providers have the resources to bring together several different technology vendors, test and then deploy a variety of home automation solutions and offer them as services. By leveraging their large customer base, service providers can explore use cases with their existing customers that may be more attractive to potential customers, further reducing their acquisition risk.
Keeping Upfront Costs Low
The key to the successful creation of smart living service offerings for any service provider lies in embracing an interoperable open-device approach and leveraging an open device ecosystem. Interoperable open devices allow service providers to select from a range of best-in-class devices and a variety of price points to keep upfront costs low. Service providers must adopt a flexible smart living solution that supports a broad set of open connectivity standards.
The goal of a smart living home is to provide true integration across devices so that customers have more insight into their smart home, from security to energy usage. Vendors that offer ways for service providers to harmonize the smart home devices through a common smart home platform for all applications and a single mobile app can help deliver a simpler and seamless customer experience. The alternative is a fragmented, piecemeal smart home and broadband plan.
Another advantage of an interoperable device approach is the ability to integrate the solution into most service providers’ operation support systems, business support systems and other back-end systems. Additionally, most open smart home software platforms can run on a public cloud or in a service provider’s private cloud, further reducing deployment costs. Service providers should look for vendors that take a consultative approach to add smart living offerings. A vendor should take the time to ensure that the solution integrates well with a service provider’s network operations. This not only enables service providers to deliver a good user experience but also helps ensure the solutions do not add additional management and overhead to the service provider’s network of teams.
Revenue Sharing: Extending Monetization Beyond The Device
Offering smart living solutions is just one way for service providers to monetize their broadband plans. They can also develop and cross-sell premium package subscriptions to develop new and recurring revenue streams.
Home security, the primary entry point for most smart home device use cases, may demonstrate one of the best opportunities for service providers to create premium packages for their customers. Besides offering basic smart living security packages with cameras and door and motion sensors, service providers can also offer cloud storage subscription plans for their customers’ surveillance videos. To extend monetization opportunities even further, they may even build on these packages by offering monitoring service plans for additional monthly recurring fees or partnering with security companies.
Service providers can use network analytics to establish customer dashboards and provide personalized monthly reports. A smart living package focused on improving energy consumption utilizing smart appliance plugs, for example, can leverage analytics to monitor consumption trends and help the customer improve their energy efficiency.
Service providers can also monetize smart living offerings by partnering with property management companies. Smart lifestyle devices allow property managers to receive early notifications that allow them to dispatch maintenance teams quickly. This can prevent extensive and costly damage from, say, a leaking pipe. Smart locks also permit managers to let tenants into the building remotely if the tenant loses a key, saving on maintenance time.
Preparing For The Future Of Smart Living
Bundling broadband with smart living services makes the services stickier for the consumer, helping reduce attrition as more devices are added to the smart living solution. By looking for these opportunities through leveraging the open ecosystem of smart living devices and software, service providers can expand their broadband offerings, disrupt the current OTT model, increase market share and capitalize on the coming wave of broadband growth. It sounds like a smart bet to me.
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