Connected homes: The case for operator involvement
The connected home market is a confusion of products, proprietary interfaces and connectivity, so why would a network operator want to get involved? With every Tom, Dick and Harry from white goods manufacturers, lighting companies and security firms, to the ubiquitous Alexa and its clones, it doesn’t look like natural territory for your average network operator, loving as they do common standards and interoperability, says freelance telecoms writer, Peter Dykes.
To get an angle on why most of the world’s major operators are looking for a slice of this market, their ‘fifth play’, if you will, VanillaPlus’ Operator View (OV) spoke to Thomas Rockmann, Deutsche Telekom’s vice president of the Connected Home. He is distinctly upbeat about the opportunities for operators in the connected household, not least because they’re already there in the shape of mobile devices, Wi-Fi and broadband.
OV: What would you say are the main advantages operators have over other players in the space?
TR: The smart home sector is indeed an exciting and potentially valuable asset for a whole range of players in the ecosystem, but network operators are arguably best placed to benefit from the market as a whole. Network operators have ongoing and trusted relationships with home consumers and own a billing relationship with customers that have been granular and tiered for decades – both aspects helpful in introducing new smart home services and business models.
OV: Why should consumers choose operators for their smart home connectivity?
TR: The existing connectivity that network operators offer consumers, through their Internet, telephone and other packages, means that the network operator already has one or more access points, which can be leveraged to enable additional services. By offering faster and more reliable connectivity, the network operator moves away from being a bandwidth services provider to an integral part of the consumers’ smart home.
OV: Are there any other reasons consumers should go with a network operator?
TR: In addition, network operators have technical skills (in the form of an engineer network) and customer care implementations that are precisely tuned to introducing, providing, explaining and troubleshooting new connectivity-based services. Most network operators are already comfortable supplying remotely managed in-home hardware, something that white goods manufacturers are only just beginning to be able to claim.
OV: Isn’t there a danger of operators becoming connected home dumb pipes?
TR: Network operators are facing up to the increasing issue of disintermediation, where the providers of ‘connectivity’ become simply stewards of the data pipes and face the parallel challenges of downward price pressure on a service that is now regarded as merely a utility, and the ongoing maintenance costs of providing ever-faster data speeds at ever greater volumes.
OV: So how will operators own the relationship with the connected consumer?
TR: For a network operator to continue to own the relationships mentioned and critically, to continue to earn the trust and recognition of the customer, it is important for them to be at the forefront of delivering the next generation of products and services, both around the smart home and the increasingly promising world of digital companions.
The bottom line however, can be summed up by Rockmann’s response to the question, “Why should network operators get involved in the connected home? He says, “You might ask ‘why would a network operator get involved?’ – but an operator might ask whether they can afford to not be involved…”
By Peter Dykes, freelance telecoms writer