Service providers around the world are advancing their in-home networking strategies to meet evolving demand that reflects more tech-savvy and bandwidth-hungry customers who are always looking for quality, next-generation services. It’s no different in Latin America.
But the hypercompetitive Latin American region is also price sensitive, which creates notable business challenges. We caught up with Bernard Kiriakos, Technicolor’s Vice President of Solutions for Latin America with Connected Home, to discuss how service providers in the region navigate these challenges — and how Technicolor works with them — to rethink and innovate their in-home networking strategies.
Kiriakos: The issue of in-home networking environments is definitely escalating in importance. Until recently, most broadband operators in Latin America were focused on delivering access to the home. Essentially, as an operator, I’m measuring myself on the number of households I have connected and the speed that I can provide to the households. But, if you think of it, broadband is not really a service.
A service should deliver an experience: it’s communication, it’s a collaboration service, it’s remote teleworking, it’s remote education, it’s smart home, it’s social media, it’s gaming, it’s blogging.
Those are the real services people want, and consumers use broadband to access these services. Consumers in the region are learning that the quality of the experience is what they really want.
So, what we’re seeing today is broadband operators taking a step back and realizing: We’re not really just delivering the product to your house; we need to ensure that the services we’re delivering are effectively available to consumers’ devices.
As a result, all of a sudden the stakes get much higher, and across Latin America many companies now have a “vice president of user experience.”
So yes, definitely it’s a very, very big priority to ensure that the service — and I don’t mean broadband, but the ultimate service — is being delivered, and that requires a good in-home network.
Kiriakos: Once the broadband pipe is available to the home, then it’s possible to extend a service. Let’s take the example of a video over-the-top (OTT) service, or a smart home service. Say I’m an operator and I want to enable a smart home service or video OTT service, and I realize that there’s no [physical] way I can connect an Android TV set-top box in the home -- or a camera in the home -- because my consumers are unable to reach the camera (due to poor connectivity).
So I realize that even if I’m able to deliver up to 100 Mbps — and you know there are several operators in Latin America that offer fiber and DOCSIS 3.0 in 100 Mbps and 50 Mbps service — that doesn’t mean I’m able to deliver the ultimate experience for the customer. Broadband operators are realizing that we really have a problem, and we need to rethink what we consider our “service” to be.
The issue is that consumers today call and say: “My gaming experience is not working; my video is stuttering.”
This opens up a lot of questions for operators: What do we do? Is this even our problem? Do we even need to be involved in this problem, or do we let the consumer handle this problem?
The fact is that there is, a financial cost to addressing the problem. There’s a complexity in addressing it. It requires serious operational involvement.
However, if I’m a broadband operator and decide not to get involved in this problem and don’t make it mine, then I’m unable to offer new services myself. I cannot go and offer an OTT and a smart home service if I’m not addressing the problem of coverage and in-home networking.
So the dilemma becomes: “Do I become only an access provider, meaning that I stop at the home as was mentioned earlier, and if I do that, am I allowing a third-party service provider to step in?” In other words: “Am I allowing a competitor to walk in?”
Kiriakos: Yes. In general, we’re now converging toward a Wi-Fi service inside the home. Connectivity is driven by the consumption devices. Look at a gaming laptop. A lot of people are now using gaming laptops and connecting over Wi-Fi. Years back people would use an Ethernet cable. If we’re looking at the mobile phone, it is now often being used to Google Cast or stream to your TV. I would say the vast majority of devices in the home are now Wi-Fi connected, including printers and things that don’t move a lot. Set-top boxes are as well. And so Wi-Fi is becoming the de facto standard for connecting in the home. And, when we talk about in-home networking, we’re also asking ourselves how to enable coverage in the home.
That doesn’t mean there’s no place for wired networking. Often there’s a backbone technology needed to extend wireless coverage inside the home. But within the in-home market, we’re seeing an explosion of ideas and technologies to help address wireless coverage.
But before we talk about technology, I think it’s important to look at the business side of it. When we talk about a service, the first thing that people will tell you is that service today should have multiple levels that feature different offerings. It is important to recognize that one size does not fit all. You cannot just go to all customers and treat them identically.
There has to be an acknowledgment that some customers are going to require hand-holding; they need better equipment; or they need the different service layers. That’s the first part of the discussion that’s ongoing.
The second part of the discussion is that making different layers of service requires investment. Someone has to pay for the cost of delivering that better service.
This requires service providers in the region to re-think how the cost-justify their investments in technology, and how they structure their service offerings to consumers.
If I add an extra piece of hardware, what is going to happen to create a return on that investment?
We’re having more of these conversations with service providers in the region so we can get the right answers. In-home networking it’s not just about the technology. The issue is not resolved by just delivering a bigger box.
Kiriakos: This is exactly the discussion that has to go on. As service providers offer better coverage, how does the operator monetize it with new services? And if there are no new services, maybe it’s a new experience, maybe it’s a new support structure that is extended to the customer.
Kiriakos: Today, consumers in Latin America and other consumers around the world are equal in their use of technology. There are as many gamers in Latin America as elsewhere. Brazil is a big gaming country; so is Mexico. You have as many users of social media in Latin America, which often pops up to the top of the charts.
So, from a technology and an application usage point of view, I would say Latin America is at par with the rest of the world. But from a service-offering perspective, broadband operators in Latin America have not been as aggressive in going out and offering service layers to their customers. And I think that opportunity exists because there is definitely an appetite out there for new services.
Latin America is an interesting market because in and of itself, it’s very competitive. The pricing, as well as the value, is very high. In Latin America, the broadband operator delivers the device, the customer-premises equipment (CPE), as part of the service.
That is unlike North America where you tend to pay for that set-top box or you pay for that CPE, separately.
While it doesn’t seem like much to the average consumer in North America, adding a CPE charge in this region could mean having to wait another 6-9 months before getting your ROI.
So, because the market has been hypercompetitive, broadband operators have been very shy about making investments in in-home environments. They’ve been in the mode where “we need to compete, we need to keep our profit,” and as such, service providers have traditionally taken a conservative approach to the market.
But I think today we’re at a junction where operators have to rethink that broadband strategy. If I’m always going with the lowest cost, how am I going to deliver profitable new services to my customer? How am I evolving my service?
You have to ask yourself if being passive creates an opportunity for another company to enter the market to offer consumers a better experience.
I think there’s a business opportunity for broadband operators to scale up in terms of service.
Kiriakos: We are revisiting basic concepts with our clients in the region. We need to go back to “people, process and product” to understand the situation. Do we understand who – among our subscriber base – is having a quality of experience problem? Are we training people to assess the problem? If someone calls, are we able to identify, inventory the problem? Do we have a process in place to handle the issues? Because the first step to deploying better and more profitable services starts with understanding consumers who are in many different types of environments – from multidwelling units...to single family homes.
What we’re uncovering — and this isn’t a problem only with Latin America — is that broadband providers, whose mentality was to stop at the home, have a very weak view of what happens inside the home. If you ask an operator how many iPhone devices or how many tablets are in a home, or if it is an Android deployment, if there are wireless printers, etc....most service providers acknowledge a lack of understanding of what is inside the home.
Most operators are unable to say, “Well, if I deploy a 5 GHz Wi-Fi router and I deploy a repeater, it’s going to solve the problem,” because they don’t have enough visibility inside the customer environment to make an informed decision.
This can be an opportunity to think about tools that help understand what is going on in the home. Before we say, “Here’s the answer: get a bigger gateway, or move the gateway around,” we have to measure the experience index of the user.
At Technicolor, we have a product, Wi-Fi Doctor, which is built around the concept of the Wi-Fi experience. This is because, in order to fix the problem, we first have to measure the issue.
We have solutions that can address diagnostics and measurement perspective. We have other solutions that can be used by the contact center or call center that’s taking the in-bound calls. We also, however, train the call-center operators to ask better questions to address inventory issues so that service providers can gain more insight into what is happening in the homes. That’s an example of how people, process and product issues can be tied together. It’s not enough to have the tools. If you don’t have people who know how to use the tools, you can’t get anywhere.
This is how we can help our customers better understand and assess situations, develop better segmentation strategies, and deploy better product strategies.
Kiriakos: We have never been more successful than in the past nine months in terms of having this dialogue. We took a step back from trying to push product because we realized that pushing the product is not the answer.
Over the past few months, we’ve been invited more often than we have in the past three years to have this specific discussion with our clients and prospects. It is because we took the approach that this is not just a product problem; this is a business problem.
We are all coming to the same conclusion that if there is a consumer aspect behind it, there is a service layer imperative behind it as well. This means that we have to address new marketing and operational opportunities.
As a result, we’ve been a lot more successful in getting traction and getting conversations across different types of service providers and across the organizational chart. We are resonating not just with the executives, but even with engineering and operations groups.