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Can Telcos Take the Lead in the Smart Home Race?

Can Telcos Take the Lead in the Smart Home Race?

The smart home market has moved out of the early adopter stage. In recent years, we have seen an increase in connected smart home technology—with over 50% of households owning a smart home device—and this rising demand is providing a growing opportunity for telcos to play a bigger role in the ecosystem.

While technology giants such as Google, Apple and Microsoft are significantly increasing investment in the smart home, telcos hope to take the lead by leveraging their established presence within their customers’ homes. By packaging existing services, such as fixed-line broadband and mobile subscription plans, with new smart home offerings, telcos have the opportunity to re-define their standalone products as bundled smart home solutions.

Below, we highlight three clear opportunities for telcos in the smart home ecosystem.

Building An Ecosystem For Future Enablement

The smart home market has yet to see a comprehensive management tool which spans across entertainment, broadband, security and utilities. But because the smart home monitors and interacts with the home through mobile phones, in-home connectivity and access networks, the telco is well-placed to take up this role. What’s more, tech giants continue to lean on the telcos’ existing IP networks to enable their services, meaning telcos could remain one step ahead of the competition.

To unlock the full value of their existing assets, telcos must build an open platform architecture that allows external parties to create new and built-in solutions, forming a cooperative ecosystem that serves the customer end-to-end. Forming partnerships across industries and B2B markets will place the telco in the center of this new ecosystem, positioning them as the data protector and top-line enabler of smart home solutions.

Additionally, there is an opportunity for telcos to open new revenue streams by aggregating data collected through the smart home ecosystem for their own use or for third parties via licensing. As long as this is done in a GDPR-compliant way, telcos can hope to build on the trustworthy relationship they already have with their customers.

Enhancing Everyday Interactions

By nature, many consumers will continue to shop around and compare offers before investing in new technologies, so customer experience is likely be the key differentiator between solution providers. As the complexity of a single user’s digital experience increases through multiple subscriptions, OTT services and additional streaming needs, a smart home solution must be omnipresent throughout all interactions, offering a reliable comfort blanket that encompasses a user’s full digital experience. The end user is becoming increasingly aware of the communications between devices within their homes, but usually cannot bother with the technical, operational or security details. Therefore, it is ultimately the responsibility of an orchestrator to provide peace of mind for the customer by ensuring that this process is happening seamlessly, securely and reliably in the background. Telcos are in a perfect position to fill this orchestrator’s role.

Telcos must create a frictionless platform—beyond simple design—that collects and acts on data to offer much more purposeful interactions. This will empower users to adopt and design their own customizable solution while helping telcos build a better understanding of their customers to create smarter, more responsive products. Telcos must also look at current user journeys to create engaging and fun solutions that don’t merely shift current interactions onto a new platform, but solve actual problems for the customers, thereby enhancing and simplifying their experience. 

Creating Demand For Services Beyond Set-Up

Customer service and technical support are elements that every communications service provider (CSP) must master at scale if they want to grow smart home services. First-time users will look for guidance on how to install and set up their bundled solution, but as complexity increases and the smart home houses more and more devices, a digital customer service journey should be able to solve the majority of issues automatically and ideally with little-to-no customer interaction. In the case that an issue requires further attention (e.g. an on-site technician for troubleshooting), the platform should support this with the highest possible convenience to the customer (e.g. by automatic scheduling of appointments). By creating a hardware-as-a-service proposal, consumers pay less up front and establish an ongoing support and service relationship with the provider. Once users have committed to a relationship with the telco, they are more likely to remain loyal, repeat customers.

There is huge potential for telcos to extend their existing customer support environments by connecting their devices into a controlling platform which can collect, store and analyze data. This will require the integration of modern tools to gather insights across multiple levels of interaction. By connecting all areas of the smart home into one back-office platform, it becomes easier to help customers diagnose issues (via customer service) or even make the information available for customers to troubleshoot on their own. In turn, the collected data will drive actionable insights powered by predictive and prescriptive analytics across a fragmented smart home network.


Telcos have the opportunity to move up the value chain and operate at the service layer, shifting from a commodity to a highly differentiated service. While capitalizing on existing customer engagements as well as their trusted position in the industry, telcos hold a key advantage over other tech players who are entering the market. By focusing on customer experience and service simultaneously, the value of the telco will increase with a strong, bundled smart home solution. 


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