Operators Need to Provide More Than Connectivity as Broadband Markets Saturate

Smart Home solution provider Plume and broadband Customer-Premises Equipment (CPE) provider Technicolor recently announced partnership agreement to integrate Plume’s Consumer Experience Management (CEM) Platform into Technicolor’s broadband devices. Plume’s CEM platform combines personalized front-end consumer services and data-driven back-end support tools. The partnership enables Technicolor’s broadband devices to support smart home services including whole-home adaptive Wi-Fi, Artificial Intelligence (AI) cybersecurity, advanced access and parental controls, motion detection, and personalization, all delivered through the Plume App. Support for such features is among the key strategies to differentiate broadband services.

The global broadband market has been increasing in terms of both coverage and access speed. Investment by broadband operators, together with government initiatives for universal broadband services, have achieved 50% broadband penetration globally. Despite this, broadband penetration rates vary widely across different markets. In emerging markets, the majority of the population relies on mobile networks for broadband access. Low Average Revenue per User (ARPU) is one of the barriers for operators to invest heavily in fixed network expansion, resulting low fixed broadband penetration. However, in developed markets, residential broadband services are nearly saturated, reaching close to 100% household penetration.

The COVID-19 pandemic has accelerated the need for broadband access in both mature and emerging markets. Many homes in emerging markets without broadband access are forced to subscribe to a broadband service. In mature markets, consumers have upgraded their existing broadband services to a higher bandwidth package or upgraded the broadband CPEs to support higher efficiency and manage the bandwidth demand within the household. Broadband service providers around the world have also seen a significant increase in broadband traffic during the lockdown periods. The pandemic has highlighted the crucial requirement of broadband access and the importance of Quality of Experience (QoE) for broadband users. Such requirements also create opportunities for multiple players in the broadband service ecosystem; broadband service providers, CPE providers, and software providers.

Broadband service providers have been focusing on improvements in network infrastructure. The expansion of network coverage naturally helps operators gain a subscriber base as the network expands to unconnected areas. Infrastructure upgrades enable operators to gain competitive advantage by supporting higher speed broadband. In the markets where most broadband service providers support gigabit speed, providing a higher speed broadband will no longer be a differentiator to maintain subscriber base. QoE will become the key decision-making factor for consumers.

For many high-speed broadband homes, high-quality Wi-Fi is the center of User Experience (UX). The COVID-19 pandemic has proven this even more clearly as consumers have struggles to share their home Wi-Fi networks for multiple use cases. Especially as the use of live video streaming for work, education, and online video and game consumption has surged throughout the pandemic, high quality Wi-Fi has become essential for home broadband. This has led to consumers upgrading their Wi-Fi CPE to higher Wi-Fi standards, such as Wi-Fi 6, and mesh devices to support Wi-Fi in every corner of their homes. Providing higher capacity Wi-Fi hardware is not enough to achieve customer satisfaction. For home broadband users, calling for technical assistance is time-consuming. Technical assistance calls, which cost time and money, are not good for service providers either. Service providers can take advantage of software solutions that support cloud-based home network management. Investment in solutions that support self-installation of hardware and self-diagnosis of in-home Wi-Fi network problems will provide better UX. AI-assisted virtual assistance and network analysis tools are useful solutions without the need for a technician. Especially during the pandemic, technician visits for CPE installations and diagnoses are not the best options for customers. Such solutions will benefit service providers even beyond the pandemic, since self-managed Wi-Fi solutions also enable service providers to reduce operating costs. Technicolor and Plume’s partnership is one example that supports such a requirement.

While better connectivity could be a focus for emerging markets, broadband homes in mature markets are widely adopting Internet of Things (IoT) devices. Broadband operators, in partnership with CPE vendors and software providers, can develop the smart home ecosystem and leverage their relationships with broadband users to provide smart home products and services and enable third-party providers to offer such services. In order to help service providers maximize revenue generation, solution providers need to offer products that support Time to Market (TTM) and are easy to scale as required. Efficient data analytics solutions can also help service providers create new business models and offer personalized services. Ongoing 5G rollouts, increasing fixed broadband penetration, and the adoption of smart home devices and other online applications will continuously accelerate consumers’ expectations regarding the quality of broadband services. Service providers should differentiate themselves by investing in technologies to provide seamless connectivity among multiple devices within the smart home while supporting superfast connectivity.