Smart Home verticalization strategies for ASEAN operators

Wed 11 Feb 2015

“The smart home is the first step to a whole new world of intelligent services.”

What attracts operators to smart home services?

T. D. The countries belonging to the Association of Southeast Asian Nations (ASEAN) can be divided into two broad groups: first, markets with well equipped, tech-savvy consumers very receptive to new home monitoring and smart metering services, then others experiencing fast urban expansion and intense building activity for which smart home services need to be studied at an early stage as a real opportunity. In both cases the profusion of equipment and technologies imposes good organization, standardization and coherence.

How can these operators position on the smart home value chain?

T. D. In the B2B model, ASEAN operators position as service aggregators on vertical markets such as smart home, e-health or smart grid. Exploiting their business expertise in datacenters, connectivity or device management, they design connected homes and help property developers to propose added value in their buildings. They can manage projects on behalf of owners. The partnerships with other economic players induced by this positioning create the impetus needed to conquer new territories and build new revenue streams.

In the B2C model, the smart home tends to become an integral part of the multiplay value proposal: it becomes an additional functionality alongside telephony, TV and web access. It adds value to the household Internet access and stimulates sales. Two scenarios are possible according to the maturity of the market. In the first case, residential broadband access is widely deployed and competition is fierce (Singapore, Malaysia), so smart home services enrich an existing convergent offer. In the second, broadband access is still being deployed according to a national master plan, in which case a smart home offer is differentiating because it is an innovative value-added service.

The operator’s ability to make simple what is in fact rather complex gives him the key role of guaranteeing a unique, impeccable, rich end-to-end customer experience. Service quality necessitates excellent network management and supervision. Grouped offers reduce the cost for the user of access to smart home services of which the most popular are today telesurveillance (e.g. monitoring of domestic personnel activity) and energy budget control (e.g. air-conditioning spending).

Another possible B2C positioning on a fragmented smart home market is as a solutions integrator (devices, gateway, platform, applications) to guarantee a genuinely integrated offer that is centralized, tested and standardized. Orange has made this choice and launched its “Smart Home” service in Poland in 2013 and in France in 2014. This innovative service has strengthened the loyalty of Orange’s customers and boosted its brand image. A third emerging model, B2B2C this time, could also be considered: teaming up with a telesurveillance company or an energy supplier makes the operator’s smart home solution appear relevant and credible. Similarly, selling services through an alternative distribution channel such as do-it-yourself stores is a way of reaching new customers.

Why should operators invest in smart home services?

T. D. Innovations in intelligent devices help to boost brand recognition and user fidelity. In parallel with the emerging connected home concept, a much vaster trend driven by the “Internet of Things” and its corollary “Big Data” and “Machine-to-Machine” is gaining momentum. We find more and more communicating devices in operators’ product catalogs, and as they become more intelligent they need to be managed, monitored and supervised. Doing this also enhances the operator’s global value proposal. In view of operators’ core business and today’s unstoppable digital transformation, the smart home appears as a first step towards a whole new world of intelligent services ranging from management of a single building to transportation and energy and smart cities.