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New revenue streams abound as connected homes accelerate

As consumers bring more connected devices into the home, service providers will have a real opportunity to capitalize on this growing market. Expected to rise to a global market share of 53.45 billion dollars by 2022, the connected home is developing along with the advent of IoT, according to Statista. This increase interest in the connected home has begun to reshape the relationship between the service provider and consumer and provide an opportunity for monetization, though not without challenges.

Consumers are increasingly expectant of their service providers to deliver on the concept of the smart home, whilst at the same time guaranteeing high-quality, fast broadband services. However, providers also have to navigate the network security challenges of the connected home, all while ensuring their business models and strategies guarantee competitiveness against the likes of Amazon or Google to consolidate their position as the go-to connected home provider of choice.

By offering a managed Wi-Fi service, service providers are in a prime position to take advantage of the available opportunities despite these challenges. This can be accomplished through interoperability, which can be achieved by combining open source and open standards. For example, organizations could use Broadband Forum’s connected home standardized architecture specification, the User Services Platform (USP), TR-369.

New trends, new challenges

In the journey towards monetization of connected home services, service providers are presented with a number of obstacles. A key reason stems from the fact that there is little differentiation in the consumer environment between Wi-Fi and internet, leading customers to expect their broadband service providers to offer support on device-related issues when installing or managing their connected home devices.

Operators are being held responsible for poor device and application performance by their customers because they perceive the integration of devices, applications and internet services as part of their overall broadband experience.

Furthermore, with the advent of companies such as Amazon, Google and Apple entering the connected home marketplace and developing a unified way of addressing the market, there’s a real threat that the connected home sphere will be completely monopolized by over-the-top providers. For example, this represents a network issue, especially in the event of a security problem or a bad-quality experience, as the service provider will be expected to deal with it.

Turning challenges into opportunities

Enabling a managed Wi-Fi service is at the top of the agenda for many service providers due to the fact that the network can get blamed for a lot of problems, including poor service. Service providers are therefore seeking to have the control to manage the Wi-Fi experience and ensure it is carrier-grade and in accordance with what the customer would expect.

Service providers are uniquely placed to deliver this proactive management of the home network. If we consider the broadband home router as an essential and central point for connectivity and network security in the home, providers can utilize it to act as a central nervous system managing all services for the customer, including billing and customer support. Additionally, service providers are able to offer premium services including network security services.

With the experience and expertise of installation, management and troubleshooting — along with a direct line into the customers’ home via the router — providers can establish a single point to streamline and simplify what would otherwise be unfamiliar and complex territory for the consumer, ultimately enhancing their experience.

Interoperability is the key to monetization

The benefits to service providers offering an enhanced customer experience is clear. However, the path in effectively delivering this while ensuring cost-effectiveness and a viable business strategy is less so and involves navigating a mixture of technologies.

If the connected home market is to be monetized by service providers, it is vital that they are able to seamlessly migrate and evolve their systems with technologies on the market, such as those introduced by consumer electronics companies. As these products are proprietary and siloed, there is a risk of a limited market developing to the detriment of service providers.

This can become an issue because service providers invest heavily in the infrastructure and operation of their network and subscribers. Furthermore, the security flaws of smart devices, home gateways and Wi-Fi being introduced into service providers’ managed networks presents a problem.

It is only through interoperability on the basis of standards that a thriving broadband ecosystem can be achieved, allowing the connected home concept to flourish and open the door to new use cases, such as Wi-Fi management, network security, parental control, home security and home automation, all of which can be enabled with a system of agents and controllers.

Standards to meet an evolving ecosystem

Broadband Forum’s USP is one example of a standard that addresses the proliferation and adoption of connected devices, providing a unified, common approach to deploying, controlling and managing Wi-Fi, application-enabled gateways, smart home and IoT devices. USP was developed by service providers and managed devices manufacturers.

Providers use standards like the USP protocol to develop sources of new revenue, and work with third-party providers and app developers to create services together. Using a standard assures operators that what they build will fit into an established ecosystem. USP provides a standardized way of modelling controls and sensors for network security and how data is collected. As 5G becomes a more prominent feature in the home and in businesses worldwide, the standard will include developments into Fixed Wireless Access (FWA) in preparation for 5G, such as adding 5G data interfaces to data models to ensure USP can be applicable to the deployment of FWA.

As the number of connected deployments increase, they must be continuously managed and improved to flourish effectively and benefit the end-user.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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