Will Verizon pave the way for telco's in the Connected Home market?

Posted: 24th January 2012

Verizon, the American telecommunications giant, recently launched its range of Connected Home devices and services to give consumers a comprehensive Smart Home ecosystem. The new system offers a broad range of Connected Home devices from smart door locks to energy monitoring equipment, all manageable remotely from the web or a smartphone app.

The sharp growth of cloud computing and the so called “Internet of Things” has been a driving force for the Connected Home market, the growth and potential of which has been extensively documented in the media. Verizon’s foray into this space is significant because they are the first major telco’ to make a move, and take a risk.

There have been a number of articles, white papers and info graphics recently that have all illustrated similar points – the Connected Home market is going to be big. A recent report by Visiongain, the independent business information provider, comments about how telco’s in particular might be impacted by the growth of this market - “The Connected Home promises to transform operator revenue streams with total revenues exceeding $231 billion by 2016”.

Furthermore, Vince Vittore, Principal Analyst for the Yankee Group, believes that value added services like the kind now offered by Verizon are now so important to consumers that they are not just an interesting product extension for operators, but essential services. “In our U.S. consumer survey, home monitoring and home control services rank high in desirability among both broadband and mobile users…. So high, in fact, that we believe both have become must-have services for all broadband and mobile providers. The fact that Verizon Home Monitoring and Control is built to seamlessly function on the customer’s computer, smartphone and FiOS TV screen, is a significant differentiating factor for this new digital home product.”

Verizon’s entry is an important step because telco’s have so far been surprisingly cautious about moving into this market – it’s surprising because of all the companies out there it is the telco’s who are almost perfectly positioned to offer these new value added services to their customers. As Connected Home services are predominantly leveraged over broadband, they become a natural extension to a telco’s typical portfolio, and the benefits are clear.

Verizon’s less than tentative steps into this emerging market are a clear statement of its ambition and could be significant, in that, it may signify a tipping point in a market that has so far not turned its considerable potential into actual consumer demand. Verizon’s entry in itself may act as a kick start, giving encouragement to other telco’s that have, as yet, remained firmly on the fence about the Connected Home space. This influence will not just be limited to the US market either, as operators from around the globe will be keenly watching to see how things unfold. Verizon’s entry could be viewed as somewhat of a validation of the statistics; however, there is still significant risk, as the proposition is still relatively unproven. The dilemma remains – take a gamble on a market that offers much but has delivered little, or do nothing and risk falling behind the competition and with it a piece of the predicted $231 billion market.

Featured News.