Connected-Home Services Have Revenue Potential for Broadband Providers

LONDON - Broadband service providers looking to grow their businesses with connected-home services should target home security and monitoring, smart energy control and media sharing markets, according to new research from Ovum, an independent telecom analyst firm. However, these services today are often priced significantly higher than consumers are willing to pay.

Ovum surveyed consumers in the U.K., the U.S., Australia, France, Germany, Spain and Japan to discover their interest in purchasing connected-home services from broadband providers. Currently, the most common add-on services to broadband are email, technical support and PC security. However, Ovum found that consumers expressed strong interest in receiving home security and monitoring, smart energy control and media sharing services, even though take rates for these services today are fairly low.

Home Security, Smart Energy and Media Sharing
Twenty-one percent of those surveyed were interested in home security, where broadband providers could potentially offer services such as monitoring and control via smartphones; 27 percent said they were interested in smart-energy solutions, which would help them control and monitor the amount of energy they use; and 20 percent said a media-sharing service that connected all their devices would be something they would like to receive from their broadband provider.

Michael Philpott, Ovum principal analyst and report author, comments: “The strong interest from consumers shows the potential this market offers to broadband providers. However, to realize it they will need to get their price right, as with all connected-home services, low willingness to pay is a major factor. According to our survey, just four per cent of those that expressed an interest would be willing to pay some of the high monthly fees that are currently on the market.”

Philpott continues, “Smart-energy solutions are a hot topic in many countries, and a significant proportion of people would be interested in receiving services from their broadband providers. The U.S. has the greatest proportion of people willing to pay for the service, with just 16 per cent saying they wanted it for free.

“Although starting from a low base, media sharing is another service with significant potential, especially in France, Spain and the U.S. However, pricing is again an issue, with many of the consumers we surveyed stating that they would expect to get this service for free.”