Management of residential broadband services inside the home is an important opportunity for CSPs.
The home network is growing steadily more complex. Most consumers are now accustomed to the challenges of setting up and securing a Wi-Fi network with a few PCs, printers, and other peripherals. However, customer premises equipment (CPE) is proliferating as the entertainment industry matures, requiring the installation of VoIP gateways, set-top boxes, wireless routers, DSL and cable equipment in order to provide voice and video applications over IP.
This may sound complex, but we can expect the connected home of the future to become much more so. Webcam surveillance and IPTV will bring further complications in the configuration and troubleshooting of home networks. Looking further into the future, home femtocells are a viable option for a more cost-effective access technology.
To help consumers to cope with this ever-increasing complexity, many communications service providers (CSPs) are now exploring the potential for offering home network management services. This is an important opportunity to extend residential broadband services beyond the provision of a basic broadband pipe into the home, and has until recently remained a ‘blind spot’ for CSPs. Many now see it as an opportunity they can ill afford to ignore in their pursuit of new interactive services.
Can advanced residential broadband services succeed without the provision of home network management?
No, not if CSPs want to provide more value to the consumer than a simple Internet connection.
Home network management can help CSPs to answer two critical business issues – the cost of setting up the service, and quality of service inside the home. Setting up IPTV in a new site can take a day or more to complete, leading to significant labour costs. These installation costs are too large to pass on to the consumer directly and in full.
In terms of the required quality of service, IPTV brings with it much higher sensitivity to delay and latency. Unlike conventional TV broadcasts (which do not share their broadcast medium with other data streams), IPTV is typically delivered over the same infrastructure that is also used to deliver a host of other services. Most of the problems associated with delay and priority of IPTV services therefore occurs in the most constrained part of the network, i.e. the last mile to the home (which includes connectivity in the home).
What approaches are CSPs pursuing to improve the customer experience and how successful are they?
CSPs seeking to improve the experience of broadband customers can focus on providing faster and more efficient resolution of problems through more effective management of the field workforce, and then by expanding management control within the customer premises.
Many larger CSPs are working hard to optimise their processes for allocating work to their field workforce to gain substantial labour and fleet cost savings.
CSPs are also looking into ways to remotely manage devices downstream from the broadband modem in order to resolve problems quickly and without the need to dispatch a technician. Many processes that would previously have required the presence of a technician can now be dealt with using software products, helped by standards for communication between CPE and CPSs’ auto configuration servers (notably the vendor-neutral TR-069 standard).
What type of cost savings can the CSP expect from avoiding dispatches to the home in resolving problems inside the home?
IPTV is a relatively new service and the roll-out of infrastructure that supports its delivery has been limited so far. As take-up of services and installation of equipment increases, it is reasonable to expect ‘teething problems’ that require attention from a field technician, which may cost USD100–500 per visit. Potential cost savings in this area can therefore be very significant.
To give a worked example, AT&T U-Verse currently has the capability to serve 17 million homes in the USA. Based on historical experience of DSL roll-out, we may assume penetration of 15% of those households in the first years of operation, and that trouble tickets may be expected from at least 20% of that customer base. If 25% of trouble tickets require a site visit or ‘truck roll’ (at an assumed cost of USD200 per truck roll), the total cost will exceed USD25 million. While this can never be reduced to zero, it is clear that a successful drive to minimise the number of dispatches makes a compelling business case.
What are the predominant drivers for CSPs’ future spending on home network management?
Our research suggests that the key drivers determining CSPs’ future spending on home network management include:
- Reducing mean time to resolve problems reported by the consumer. Troubleshooting in the home network often requires the active participation of the consumer, which may be time-consuming and frustrating
- Improving quality of experience of video and voice services over broadband network
- Lowering operational cost for a high-volume, low-cost service
- Exploiting new service opportunities for revenue growth in the consumer and SOHO segments
- Simplifying remote management of devices downstream from the CPE.
