Rising consumer expectations have collided with supply chain disruptions to redefine how network service providers (NSPs) bring compelling value-propositions to market. While product innovation on the customer premises equipment front once provided an opportunity for NSPs to secure a competitive advantage, it has now become clear that a more comprehensive view of innovation will be required to improve their market position through 2022 and beyond.
The effects of the pandemic are expected to drag on, putting pressure on decision-makers to continue to accelerate the introduction and deployment of new exciting customer experiences, despite challenges with global logistics.
To discuss how these factors will influence the connected home market over the year ahead, here is Eric Rutter, President of the Americas for Technicolor Connected Home.
Here is what he had to say:
With 2021 behind us, what key trends do you expect to observe over the next 12 to 24 months?
2021 has been an eventful year, and it seems clear that more is in store for the market in 2022. Success in this volatile environment will hinge on understanding the underlying long-term trends while managing the more immediate short-term forces that will impact the market through 2022 and 2023. Navigating these intricacies effectively will be critical for network service providers (NSPs) serving connected home markets across the Americas.
Over the long-term, NSPs across the region are gearing up to address the growing demands for speed and bandwidth over low latency networks. These are now table stakes for operators that hope to remain competitive in today’s market. The home has become an integral part of the work environment as consumers and employers adapt to on-again, off-again shelter-in-place requirements.
It seems clear that the shift to working and studying from home will be part of the norm moving forward. This means that NSPs will have to continue to deal with the sustained demands to support remote work, education, telehealth services, online gaming, and entertainment.
It is in this context that we are seeing NSP executives make strategic investments in new technologies and business processes to support the elevated role of the connected home in the daily lives of consumers. These trends are driving unprecedented — and constantly evolving — demands for new innovative services and experiences that are based on high levels of network performance.
Over the short-term, however, supply-chain constraints have generated serious challenges for NSPs that are seeking to meet these customer demands. Critical component shortages and logistical disruptions have hampered the flow of goods and services through the value-chain.
Supply chain constraints will undoubtedly continue to be a force that must be addressed through 2022 — and beyond. While the global economic recovery has not quite reached pre-pandemic levels, the good news is that the industry is coming to grips with the new supply chain realities.
The entire ecosystem — including Technicolor — is getting better at designing, developing and deploying the products and services consumers ultimately want through today’s volatile environment.
Technicolor has embraced the principles of continuity, agility, resilience and transparency (CART) into every relationship that we have with customers and suppliers. We are all learning — with a bit of juggling — how to address the demands of the connected home industry. Despite disruptive developments, operators are establishing roadmaps for mitigating supply-chain roadblocks and continue to develop new products and technologies — even in this challenging environment.
Where do you see opportunities for NSPs to enhance their relationships with connected home subscribers?
The central strategic focus for service providers in 2022 will be to continue designing value propositions around enhanced experiences that meet changing customer expectations. This entails offering a greater variety of services that consume more resources and are more complex to manage.
For instance, the number of content and entertainment services demanded by consumers across the Americas is growing greatly. These services are being accessed by different devices throughout the home. NSPs are being asked to help consumers navigate the complexity of their content requirements, while also optimizing the performance of their devices over residential wireless networks.
NSPs are investing in network and customer premises equipment (CPE) upgrades that address these consumer demands for more reliable, higher-speed services with lower latency that offer wireless coverage throughout the home. On top of this new generation of CPE — which is more open than ever to accommodate the growing array of services from ecosystem partners — NSPs have an opportunity to offer managed services to address the ensuing complexity.
This is true throughout the hemisphere.
The industry is getting better and better at delivering broadband. As a result, bandwidth has become a commodity. Access is a finite game. Providers that fail to evolve through managed services will face challenges in enhancing the customer experience, leaving few competitive alternatives beyond lowering prices.
While customers throughout the region are price sensitive, they have demonstrated an appetite — and willingness to pay — for better experiences. The question is, how can this be offered in an effective and profitable manner.
The answer lies in open systems, automation and advanced analytics. NSPs that invest in innovation, diagnostics, and AI/ML will be able to address shifting needs of customers without overspending. Providers that fail to keep pace are going to be left behind.
Consumers throughout the region are also increasingly interested in the sustainability initiatives of their operators. This is having a major influence in how networks and CPE are designed, developed and deployed. The carbon footprint of electronics — including TVs, set-top boxes and gateways — accounts for 3.7% of global greenhouse emissions. Operators and technology partners like Technicolor have made a major joint commitment in sustainability through package design, recycling and optimized power utilization of all devices.
In fact, Technicolor Connected Home was recently awarded a platinum medal from the sustainability assessment leader, EcoVadis for the third year in a row. According to EcoVadis, Technicolor Connected Home’s performance in sustainability is “advanced” in all four categories assessed – Environment, Labor and Human Rights, Ethics and Sustainable Procurement.
What does Technicolor Connected Home recommend for NSPs to adapt to this rapidly changing landscape?
We now operate in an environment that does not tolerate a lot of compromises. While the industry continues to deal with a difficult supply chain, the imperative to innovate and create new value propositions in a cost-effective manner does not go away. The industry cannot afford to let the urgent distractions of the day disrupt the focus on bringing new exciting value-propositions to market. The only way to navigate this environment is by adopting a comprehensive strategy of innovation across all operations. No status quo can be taken for granted. All assumptions have to be challenged in the context of delivering value to address the evolving needs of consumers throughout the region. At Technicolor Connected Home, the efforts that we put into developing new CPE are matched by our efforts to find new ways of ensuring that products make it to the market at the right time, the right place and at the right price.
