In 2020, telcos successfully capitalized on the smartphone usage boom by improving network and system resilience. Despite the achievement of telcos during the pandemic, they still face a major challenge as they are too comfortable in their traditional business models of providing basic connectivity services; they are missing opportunities by not moving further down the revenue chain. Telcos will need to branch out into other areas of revenue - namely, the smart-home if they want to be competitive with larger technology companies.
However, telcos have a unique opportunity to play a valuable role in the smart home ecosystem as connected technology becomes more prevalent in households - especially as over 50% now own a smart home device. The smart home device industry is growing; a study by Juniper Research revealed that by 2025 almost 13.5 billion active devices. Moreover, voice assistant capabilities and smart entertainment devices, another aspect of the smart home ecosystem, continue to soar in popularity.
Yet, the smart home ecosystem is a well-established market, and technology giants like Google, Apple and Microsoft are poised to build more connected devices for smart homes. If telcos want to gain a competitive advantage, they need to leverage their already recognized brands and services with customers through fixed-line broadband and mobile subscription plans. Telcos can re-define their standalone products as bundled smart home solutions while also seizing opportunities within the ecosystem such as comprehensive management tools, connected device orchestrators, and establishing ongoing support and service relationship.
The chance to be the trusted partner to the customer’s (smart) home
The smart home market touches many areas including, entertainment, broadband, security and utilities; telcos are well-placed to occupy a role as the trusted partner to their customer providing a comprehensive (smart) home management tool that unties all these aspects together. The metaphorical glue is already available, as smart homes interact with physical homes through in-home connectivity, access networks and mobile phones.
Telcos have an advantage over tech giants because many of those massive corporations still use telcos’ existing IP networks to support their services. Nevertheless, telcos will need to unlock the potential of their existing assets to become the end-to-end service provider to their customers. Stepping into their role for all smart homes will require telcos to form partnerships with other industries and B2B markets, achieve prominence as a smart home solutions enabler, and build an accommodating ecosystem that serves customers and external parties.
Likewise, telcos can aggregate data from their smart home ecosystem to realize new benefits such as analytical insights and opening new revenue streams via licensing to third parties. Of course, depending on the area of the world, handling customers’ data will require levels of compliance; investing in security will build trust with users.
Fulfilling the role as orchestrator
The average user experience is becoming quite complex - juggling between multiple subscriptions with various companies of differing degrees of commitment (premium vs. free month trials), along with other OTT services, it can be confusing to keep track of everything. Additionally, the typical consumer does not have a professional understanding of the technical, operational and security features inside their smart home. Telcos can enter the smart home space by offering a solution that encompasses every aspect of the user’s digital experience. Fulfilling the role of an orchestrator will allow the user to enjoy a “hands-free” experience, content that their smart home is working effortlessly, consistently and securely in the background.
Creating such an experience for the user will require telcos to rely on the power of data. Today, personalization is everything - users want products that feel unique and provide memorable encounters. Telcos will need to build data-first platforms that can offer responsive interactions, solve real customer problems and empower users to customize their own solutions. These platforms must be frictionless and be smart enough to act upon the information they collect. Once Telcos understand their customers, they can then give them a smart home that is more streamlined than ever before.
Establishing an ongoing support and service relationship
Growing smart home services requires an ongoing support and service relationship between customers and communications service providers (CSP). Given the complexity of the smart home, the average consumer should not be left on their own to solve an issue when one occurs. By establishing a supportive relationship through hardware-as-a-service models and digital customer service journeys, telcos will ensure a boost in user loyalty and repeat buyers.
Examples of technical support services might include a starter’s guide explaining how to install and set up a smart home bundled solution. Later in the product life cycle, a digital customer service journey can automatically solve issues without user interaction. For higher-level predicaments, such as problems that require an on-site technician for troubleshooting, the smart home platform should mechanically inquire the customer if they wish to schedule an appointment then take care of the arrangement.
Not forgetting the importance of data, telcos can enhance the support and service relationship with customers by leveraging the smart home’s ability to collect and analyze information. A platform that can self-diagnose problems, glean insights and predict issues will strengthen the feedback loop between customers and technicians.
Telcos hold a distinct advantage over other tech players who are entering the smart home market. The value of telcos will drastically increase if they re-imagine and unite their traditional products with smart home technologies to craft the ultimate customer-focused solution.
