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Telcos’ Approaches to Smart Home Monetization

Telcos’ Approaches to Smart Home Monetization

Summary

Telcos have already perceived the need to expand their portfolio beyond connectivity to monetize the growing smart home opportunity. To develop smart home portfolio, telcos are engaging in partnerships and joint ventures with different stakeholders that are part of the smart home ecosystem, including device manufacturers, technology providers, application developers and start-ups.

There are four key monetization opportunities for telcos in the smart home: customer retention and acquisition, B2C cross-selling and up-selling, hardware sales revenue, and white-labeling and upsell opportunities in the B2B segment. Since none of these opportunities are mutually exclusive, most telcos today are attempting to find the right focus and mix between the four, and the state of the market today can be broadly summed up as a go-to-market trial and error.

Telcos face three dilemmas in the smart home. Firstly, the connectivity argument is obscure. For outdoor consumer IoT use cases, cellular, wide-area connectivity is an essential component, making for an easier telco go-to-market case. In the home, however, objects are connected by pervasive and often unlimited home broadband connections. No telco-locked SIM is in play; these products work over any broadband network. This leads to the second dilemma; smart home solutions - from smart lighting to surveillance - are easily obtainable, and increasingly affordable, at many electronic retailers or third-party channels. What’s more, hardware and software innovation in the smart home space is easily outpacing anything telcos can achieve. Lastly, there’s the strategic dilemma; telcos struggle to understand which use case and monetization approach to prioritize.

Telcos’ Approaches to Smart Home Monetization, a thematic research report, examines the smart home business models that telcos are applying to monetize the smart home market opportunity. Using a case study methodology, the report analyzes four leading telcos to identify key monetization approaches, provide a strategic assessment of the approaches and recommendation for telcos.

The report is structured as follows -

  • Section 1: Smart Home Monetization Aims and Models; this section provides a strategic framework of key smart home monetisation approaches available for telcos.
  • Section 2: Telcos' Approaches to Monetizing Smart Home Services; an analysis of four case studies of telcos smart home services that includes Deutsche Telekom, HKT, Comcast, and Vodafone Spain.
  • Section 3: Findings and recommendations; we conclude the report with a set of key findings and critical considerations and recommendations for telcos and vendors pursuing the smart home opportunity.
Companies Mentioned: Charter Communications, Cox Communications, Deutsche Telekom, Hong Kong Telecommunications (HKT), KPN, Rogers Cable, Samsung, Vodafone, Comcast, PCCW Global.

Scope
  • There are four key monetization opportunities for telcos in the smart home: customer retention and acquisition, B2C cross-selling and up-selling, hardware sales revenue, and white-labeling and upsell opportunities in the B2B segment.
  • Telcos are facing three dilemmas in smart home monetization: the revenue potential from connectivity is minimal, ecosystems can also be quite complex, and often telcos do not have all the in-house technical capabilities required to provide end-to-end IoT solutions and services to their clients.
  • Many telcos are focusing on leveraging their capabilities to develop cross-vertical solutions that can be applied across different IoT projects.
Reasons to buy
  • This report provides an examination of telcos' smart home monetization models to help executives understand market dynamics, determine what works and what doesn’t, formulate effective product development plans, and optimize resource allocation and return on investments.
  • Four case studies illustrate the findings of the report, providing insight into particular situations regarding smart home services and the role of telcos in service provision; this will help the reader understand both the challenges confronted in the real world and the strategies employed to succeed.
  • The report discusses opportunities in the smart home market, providing a number of actionable recommendations for telcos.
  • The report is designed for an executive-level audience, to help to understand the different approaches that telcos are adopting to foster their presence within the smart home value chain and ecosystem.


Executive summary
Section 1: Smart Home Monetization Aims & Models
Monetization Aims
Key Monetization Models
Section 2: Telcos’ Approaches to Monetizing Smart Home Services
Deutsche Telekom Magenta SmartHome
Comcast XFINITY Home
Vodafone V-Home Spain
Hong Kong Telecommunications (HKT) Smart Living
Section 3: Findings and Recommendations
Key Findings & Recommendations: Telco smart home monetization
Appendix
Acronyms and definitions
Companies mentioned
About the authors
Contact information
List of Figures
Exhibit 1: Key Monetization Aims
Exhibit 2: Key Monetization Models
Exhibit 3: Deutsche Telekom, Germany, Magenta SmartHome Case Study Snapshot
Exhibit 4: Deutsche Telekom Service model, value proposition, & monetization Approaches
Exhibit 5: Comcast, US, XFINITY Home Case Study Snapshot
Exhibit 6: Comcast Service model, value proposition, & monetization Approaches
Exhibit 7: Vodafone, Spain, V-Home Case Study Snapshot
Exhibit 8: Vodafone Service model, value proposition, & monetization Approaches
Exhibit 9: HKT, Hong Kong, Smart Living Case Study Snapshot
Exhibit 10: HKT Service model, value proposition, & monetization Approaches

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