January 20, 2021

Technicolor Connected Home’s Eric Rutter Offers State of the Market Assessment on Customer-Premises Equipment in the Americas

By Eric Rutter, SVP, NAM Cable BU & President of Connected Home NAM at Technicolor.

The network service provider (NSP) community performed well above expectations as it absorbed a sudden surge in demand for broadband access in response to the shelter-in-place policies due to the COVID-19 crisis. The industry was able to not only maintain connectivity, but also address the innumerable challenges and questions as consumers relied almost exclusively on their in-home networks to work, study, and entertain themselves.

As a result, 2020 was a pivotal year in the development and deployment of Customer Premise Equipment (CPE) to support the shifting needs of end users. This has resulted in a wave of innovation and advancements in technology that is paving the way for exciting new capabilities in 2021 and beyond. 

To learn more about the current state of CPE and how it will evolve in the future, we caught up with Eric Rutter, President of Americas at Technicolor Connected Home.

Here is what he had to say:

Q: Eric, thank you for taking the time to chat with us today. What insight can you share about the state of customer premises equipment (CPE) across the Americas.

Eric Rutter: It is a pleasure to be here. The pandemic made internet access to the home an acute necessity. In the midst of a global pandemic, content and communication services became a necessity for many around the world—including across North, Central, and South America. It created an imperative to improve all aspects of NSP infrastructure, including the quality and capacity of CPE. As a result, requirements for broadband internet access will continue to drive CPE growth in 2021 and beyond. When customers cannot benefit from distance learning, remote telecommuting or remote healthcare, the economy suffers.

Looking at internet access, there are two different markets. There is one market that currently has connectivity and has historically been served. But there is also a market that has historically been either underserved or has not had any access at all due to limitations brought about by geography or economics.

The first market, for the most part, receives premium access at 500 megabits-per-second (Mbps) service and beyond. The benefit of a larger access pipe to the home is a reduction in latency which is important for video streaming, video conferencing and gaming. Additionally, a bigger pipe improves capacity for traffic upstream and provides an overall better user-experience, which is especially important now as people work from home and use video-conferencing services while sharing important—and sometimes large—files with customers and colleagues from their home..

Moving forward, this highly competitive market will demand—and receive—more ultra-broadband and gigabyte services which will further propel growth of DOCSIS 3.1, fiber and 5G fixed wireless access (FWA) technologies.

Also important for this segment of the market is the need to optimize network performance within the home. Up until very recently, NSPs have not had a lot of control over in-home wireless local-area networks. However, as the number of devices connecting to the internet via Wi-Fi grows, so does the complexity associated with maintaining a good experience. As a result, we are seeing consumers across the Americas express interest in having NSPs manage this aspect of their digital lives.

Consequently, the rapid acceptance of Wi-Fi 6 technology is shaping up to play a key role in the user experience — and in the relationship that subscribers have with their NSPs. The addition of new spectrum is improving network speeds and providing more options into how to engage in device management within the home. All of this will be enhanced with the evolution to Wi-Fi 6E, and eventually Wi-Fi 7. This will prompt NSPs to initiate a technology refresh of CPE for subscribers.

This is important because Wi-Fi is the number one issue reported at support centers for most NSPs. That is why Technicolor Connected Home is working with NSPs throughout the Americas to improve Wi-Fi management. It enhances the customer experience, which in turn, reduces churn rates and lowers the overall cost of subscriber acquisition. Our service provider partners are investing in new Wi-Fi technologies for this very reason.

Now let me say a few words about the second market, which represents consumers who have traditionally been underserved or not served at all.

In the U.S., this market accounts for approximately 20 million homes and typically lies in rural and other hard to reach geographic locations. Within Latin America the underserved market exceeds 50 million homes. This is not an insignificant market but is challenging to serve because of physical limitations and economics; it is expensive to lay fiber for rural or mountainous areas and often consumers in these areas are extremely price sensitive.

There are exciting opportunities emerging for NSPs to reach these households with 100 Mbps services. This is a big improvement for homes that have at best received 5 Mbps access. NSPs will be taking a hard look at new FWA technologies that integrate 4G, 5G and Citizens Broadband Radio Service (CBRS) spectrum to overcome the challenges of rural and remote markets. We anticipate better access in traditionally underserved markets, which will drive growth in certain segments of the Latin America and North America markets throughout the next five years.

Q: What do you expect to see unfold for CPEs in the Americas in the immediate next 12 months?

Eric Rutter: Subscribers in Latin America and North America want the same thing—fast, reliable and secure service. Today, both markets are reporting congestion in their pipelines and problems with packet drops, pixilation, and low frame rates. These issues are generated from a shift in consumer behaviors as subscribers move from primarily web browsing to more bandwidth-intensive activities including video streaming, online gaming and video conferencing.

Meeting today’s customer expectations requires NSPs to not only deliver more services but also a higher level of service. These expectations are driving up the complexity of software and hardware that needs to be integrated onto CPE devices. The intricacy within the software layer has increased two- to three-fold just in the last couple of years.

As an example, today, Technicolor has three Wi-Fi radios utilizing Tri-Band services, as well as IOT and smart home management capabilities. The increasing number of devices in the home is pushing NSPs to leverage diagnostic applications to resolve service issues without the need for technician visits and to improve the overall experience for the subscriber.

In the past few years, memory requirements— and the footprint of Technicolor Connected Home devices— have increased from less than a gigabyte to multiple gigabytes of memory and corresponding improvements in processing power. Software enabled capabilities such as management features and security testing—which are quickly becoming requirements—will all contribute to driving an evolution of the ecosystem. We have matched these performance improvements with a commitment to creating open platforms for third-party developers.

Because of this, Technicolor CPE devices can integrate many software capabilities from our HERO Partnership Program—which includes the most innovative software and middleware developers in the industry. Our goal is to help our NSP customers be as successful as possible by making sure that we reduce the integration costs to NSPs.

Q: The pandemic created a lot of heartache including huge disruption in supply chains across the globe. Has this impacted CPEs and the business Technicolor Connected Home is conducting with its Hero Partners?

Eric Rutter: Obviously 2020 was unprecedented, but Technicolor rose to the challenge and even exceeded our customers' expectations. We were able to assess and act quickly to meet our customers' needs by remaining committed to excellence in engineering and supply chain management thanks to our CART principles of ‘continuity, agility, resiliency, and transparency’.

We’ve been a trusted partner for decades and we look forward to serving our customers across the Americas for decades to come. We will focus on helping NSPs profitably deploy new innovations—such as Wi-Fi 6, Android TV, and beyond—to better engage with subscribers and meet the specific technical, service and economic needs of their specific markets.