Home network to be key differentiator for telcos

Michael Philpott/Ovum
07 Dec 2016
00:00

As outlined in Ovum’s 2025 research series, broadband connectivity will be central to the second digital revolution and will remain the core revenue source for consumer-focused telecommunications operators.

To remain competitive, operators must look for new ways to differentiate their broadband access products, which will increasingly become commoditized. The home network is one potential area of differentiation, but it comes at a cost, and service providers will need to invest and position their products wisely.

Like it or not, the home network is seen as your responsibility

Since it was first developed in the 1990s, Wi-Fi has become one of the most successful radio access technologies in the world, and today it is used in the home networks of millions of users to connect devices such as PCs, smart TVs, and media streamers.

With users streaming ever-greater amounts of high-definition video content around the home, Wi-Fi technology has had to keep pace, and future standards are already under development that will be capable of speeds of multiple gigabits per second. However, as with all wireless technologies, issues of interference and reach will remain.

With broadband access having become nearly as critical to daily lives as electricity, the quality of Wi-Fi service – the most common final link in the supply chain – has also grown in importance. In a recent Ovum survey, respondents cited reliability as the most important characteristic of a high-quality broadband service, followed by good customer service when things go wrong; having a good Wi-Fi signal in every room; and fast broadband speeds.

The same survey showed that the majority of respondents saw room for improvement in their Wi-Fi services, with 40% rating their Wi-Fi network adequate to very poor. Consumers see the home network as important, and they also see it very much as the responsibility of their broadband service provider, which puts providers in a difficult position: The home network is an expensive part of the network for them to control.

Service providers’ main marketing strategies are still focused on speed, but they are starting to realize that it is pointless to deliver speeds of hundreds of megabits per second to a user’s home if the final connection to the device isn’t fit for purpose. One such provider is Waoo in Denmark, which has deployed an advanced Wi-Fi solution to reduce “weak spots” in the home by 49 percentage points, boosting its Net Promoter Score in the process.

Strategic positioning of advanced home-networking solutions will be critical to success, since each home is different and will benefit more from some solutions than others. Operators shouldn’t waste investment by placing advanced technology where it isn’t needed, but they do need to find a way that is cost-effective – for both them and their customer – to implement it where it is needed, if they expect such customers to remain loyal to their brand.

Michael Philpott is practice leader for consumer services at Ovum. For more information, visit www.ovum.com/

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