IN-BUILDING - Home owners
The ‘battle for the home' is a key development currently taking place within the
telecoms industry, as mobile operators, fixed operators and VoIP providers fight for what was once the sole territory of fixed operators. Although low-cost VoIP and increased coverage continue to be key benefits associated with fixed-mobile convergence, the focus has now shifted beyond voice, as mobile operators realise that by taking control of the connected home they can also open the doors to new revenue-generating services and applications. Steve Shaw takes a look inside
Increasing usage of mobile data, has led subscribers' homes to become the next telecom battleground. With multiple providers struggling to increase share-of-voice and gain their cut of the available revenue, it has become a strategic imperative for mobile operators to own the home.
Analyst house Infonetics predicts that the FMC market worldwide will be worth $46.3 billion by 2010, so there is no doubt that the future will be a connected home. But the battle to own that space has only just begun, as operators across Europe develop and launch homezone services based on dual-mode handsets or femtocells. All eyes will be on the industry to see who rises to the challenge and how the market will develop.
Indoor voice and data usage represents one of the largest growth opportunities for mobile operators today. European operators are investing in ‘homezones' to attract new subscribers and increase customer loyalty. A Home Zone 2.0 (HZ2.0) service enables carriers to deliver mobile voice and data over the IP network, rather than the expensive outdoor macro network, when the consumer is located within the home or office zone. This can have huge financial benefits for the carrier and also opens the doors for high-bandwidth services, such as downloading/ uploading pictures.
The first HZ2.0 services are already live across Europe, and include dual-mode GSM/WiFi offerings from Orange and TeliaSonera. And with leading mobile operators, including T-Mobile and Telefonica O2, announcing femtocell trials across the continent, we will soon see the launch of femtocell-based homezones.
Orange's Unik service is a good example of the potential of the HZ2.0 concept. In France, Orange's service has been deployed since September 2006. The service has delivered a 10 per cent increase in average revenue per user (ARPU), 15 per cent of subscribers who take the service are new to Orange mobile, and subscribers with a Unik service churn three times less than standard Orange mobile subscribers.
Since HZ2.0 services usually offer low-cost or free calls from within the home, from the consumer's point of view, cost is an obvious benefit, but one that VoIP providers and even fixed operators can also offer. With rising consumer demand for mobile data services, operators can make their HZ2.0 services work harder for them. By capitalising on this growing demand, operators can provide a compelling mobile data experience at home at a vastly reduced cost, so forming the foundations for their ownership of the connected home.
In the home of the future all devices will be connected (TVs, DVRs, cameras, game consoles, etc.). This picture has long been discussed, but what has never been understood is quite how that will be enabled. For the mobile operator to create that network and truly own the home, it needs to go beyond local data offload and improved coverage, and make the mobile handset the central device in managing and maintaining the connected home.
With the rise of a new generation of mobile handsets designed not only for voice services, but also data, such as the iPhone and Blackberry, the handset is fast becoming the primary access mode for e-mails, basic web browsing and social networking.
The vision of a connected home is an important part of the strategy of key players in the telecoms market, including Orange and Apple. Orange for example, has recently announced the ‘Soft at Home' initiative, a joint venture with Sagem and Thomson that aims to facilitate the deployment and interoperability of digital equipment in the home.
Apple, a newcomer to the telecoms space, is connecting the Apple AirPort WiFi router to its range of computers and laptops, which in turn accesses its iTunes service, synchronises with the new iTV server, as well as a WiFi enabled iTouch. This vision consolidates around the iPhone - a central device that could bring the connected home together.
In the battle for the home, mobile operators will not only fight with fixed operators and VoIP providers, but also other home-service providers (such as Virgin and Sky for example) and even device manufacturers. And with new players like Apple and Google entering the telecoms space, the battle has been further intensified.
The key challenge facing mobile operators is to position the handset as the central device in the home, expanding the way consumers use and experience their phones and shifting the focus from voice to data services. The handset is without any doubt a key player in this game, as it needs to operate as the link between all the different devices that form the home.
More importantly, operators have a vital advantage when compared to rivals: they manage both the macro network and the ‘homezone', being able to provide a seamless experience between both networks. For mobile operators, FMC becomes the vehicle enabling them to own and add value to the connected home.
By understanding service expectations of customers, operators can create a home network and deliver valuable and wanted services to a multitude of connected devices within the home - therefore creating, owning and using the network within the home.
From a consumer's point of view, the convenience of the connected home is a natural next step that will enable the customer to not only have access to better coverage and lower-cost services, but also to personalise the handset and services it controls according to his/her preferences and life style.
We have already seen the shift towards data services, with consumers using handsets to access e-mail, download music and videos, web browsing and social networking. In the future, this trend will only be intensified, with consumers further personalising their phones and the content they access.
The launch of HZ2.0 services in key European markets and upcoming femtocell launches gives mobile operators the opportunity to move beyond the proposition of low-cost voice. With new rivals entering the mobile space and service providers refining their strategies, the battle for the home has turned into an extremely competitive market.
By taking ownership of the mobile handset within the home, delivering high quality and unique services, mobile operators can begin to build the case for their control over the connected home. From here, they can create, own and use the home network - since they understand the service expectations of consumers. Proving value through home service delivery to the mobile handset, operators can craft a connected home network and deliver valuable and wanted services to a multitude of connected devices within the home, with the mobile handset at the heart of this new connected environment.
The homezone vision enables carriers to stay one step ahead of the competition and develop a long term connected home that cements the mobile operator as the service provider of choice for in-building communications and puts the mobile phone firmly at the centre of the next-generation in-home network.
Steve Shaw is Associate Vice President Marketing, Kineto Wireless
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