Open standards can deliver value-added services and business quality to consumers

Open standards can deliver value-added services and business quality to consumers

Michael Philpott, Research Director – Service Provider Consumer at Omdia

The smart home is in a constant flux of change. Broadband service providers (BSPs) need to remain agile to effectively deliver high-quality connectivity to every corner of the home. Competition in the market is rife, and as such BSPs are continually looking to innovate and adopt new practices to remain both competitive and profitable.

Wi-Fi management remains imperative, but leading operators are now expanding beyond basic connectivity and turning their attention to the adoption of broadband value-added services (VAS) to expand and enhance the customer experience even further. Many perceive VAS such as advanced parental controls, Wi-Fi guest access, and Internet of Things (IoT) cybersecurity, as “table stakes” and essential to the overall broadband service delivered to the customer. However, there are others such as Wi-Fi sensing and latency management where operators see new revenue uplift potential.

By excelling in this area, broadband service providers can both differentiate their service offerings and drive new broadband average revenue per user (ARPU). But keeping the consumer engaged remains a significant challenge.

Extending the customer experience through VAS

Certain applications that support the consumer by resolving service or technical issues, granting Wi-Fi guest access, and keeping them safe while online have become expected as a standard part of their broadband service. The likes of speed test capabilities, Wi-Fi management, and premium customer support were some of the most popular broadband VAS already being offered.

According to a report published by Omdia in conjunction with Broadband Forum, more than 60% of the 111 global broadband service providers surveyed stated that they had already deployed such services. While home broadband service guarantees were listed as the most popular VAS, the research evidenced that only a small percentage offered this against a service-level agreement (SLA). So, although few hard SLAs are currently offered, broadband service providers certainly see that maintaining a high level of service is now crucial to their business.

But service providers must not stand still. It is critical that they continue to innovate and develop their existing offerings as well as VAS. The parental control application is a classic example of a value-added service that has been developed significantly over a sustained period. In most cases, it now has a feature set that is more sophisticated but far simpler service for customers to use. Therefore, continued investment and upgrades of VAS when newer versions are on the market is key for service providers to remain relevant. Future VAS then present the prospect of not only improving the end-user’s overall broadband experience, but generating new revenue opportunities.

The report found that over the next 12 months and beyond, attention will turn to home security, working from home broadband packages, energy management, and IoT enablement through Matter. Another key finding was the longer-term interest in e-health applications, particularly those using Wi-Fi sensing technology – although many claimed that this technology was still at an immature stage.

VAS onboarding is a major hurdle  

Integrating new VAS with third-party partners and vendors is a key obstacle. Traditionally, launching a new service can take months of integration, especially when working with a variety of hardware and operational support systems (OSS) vendors and platforms.  The integration of VAS with various legacy OSS and proprietary technologies can make launching new services and applications a costly and technically challenging process – the risk of failure therefore is high and can limit innovation. It becomes exceptionally more challenging if the BSP has to work with multiple gateway vendors, that in turn all work with different chipset vendors

Further to this, also lies the dilemma of emphatically communicating the benefits of VAS to customers and the complications regarding measuring the true return on investment. This is compounded if the VAS are part of a wider bundle. It comes as no surprise that service providers have been cautious about their level of investment in the connected home. However, these issues can be alleviated by the adoption and deployment of open frameworks and recognized standards.

Adopting an open standards model

All respondents agreed that reduced fragmentation and proprietary technology at the chipset, CPE, and software platform level would drive greater innovation and lead to faster onboarding of VAS. 35% of respondents stated that the integration with third-party services from different vendors was slowing down the introduction of VAS.

One option is a ‘best of breed’ strategy for BSPs to take full control over the ecosystem they create and give them the best chance of differentiation in the market. To achieve this, the industry needs to adopt a fully open standards model at both the lower and high network layers to ensure that applications and software, or hardware and chipsets can be quickly and efficiently swapped out at any time without the need for further integration work. Some respondents stated that only by the full adoption of open frameworks and standards would service providers have complete control to develop their own bespoke in-house platform and truly differentiate from the rest of the competition.

An application platform based on open standards enables developers to integrate once to gain instant access to potentially millions of CPE across multiple service provider footprints. This makes the industry far more attractive to new software companies. It is therefore imperative that these standards not only bring the technical, but also the business conditions to make it easier and cheaper for third parties to introduce new ideas. Without an open framework, those developers that are willing to invest are naturally drawn to the bigger service providers because of their size.

Open frameworks and recognized standards remain critical for service providers to evolve their home solutions and level the playing field for smaller broadband companies to benefit from industry developments.

Download and read the full report here.