CSPs have huge opportunities to play a pivotal role in the connected home, according to CPE and CCAPS vendor Technicolor Connected Home, but they’re challenged with addressing rapid changes in household behaviour and expectations at the same time that component manufacturers struggle to meet increasing demand – a situation analysts predict is unlikely to be resolved until 2023 at the earliest. So what should CSPs be concentrating on in 2022?
According to Technicolor Connected Home’s Mercedes Pastor, “two big revelations” came out of 2021 – the acceptance of Wi-Fi 6 and the imperative to provide excellent customer experiences. Pastor sees an opportunity for CSPs to manage the growing complexity faced by households, while introducing compelling new CCAPS services. She argues that CSPs that have adjusted to this reality have already been rewarded with greater customer loyalty and lower churn.
To meet changing household demand, she foresees the CPE developing into a strategic and intelligent platform that adds value to both the CSP and its customers. Pastor argues that smart CPE will gather useful data about household usage, enabling CSPs to have greater control over the services and experiences they offer, and providing more flexibility in terms of how they design and develop digital experiences. It will also allow them to react more quickly and proactively to their customers’ needs. Rather than waiting for them to complain, the insight provided will enable them to automatically act upon the real situation within the household as it evolves to drive customer satisfaction.
“This is why Technicolor Connected Home is establishing deep relationships with the most innovative players in the market that can sit on top of our CPE platforms to help our CSP customers execute their business transformation strategies,” Pastor explains. Innovations and partnerships encompass the ability to leverage AI to develop sophisticated applications and to help CSPs support their customers to reduce their environmental impact. Pastor is keen to emphasise that Technicolor Connected Home has already acted to put sustainability at the heart of its design, development and distribution. The company holds a platinum medal from EcoVadis, which it was awarded for the third year in a row. EcoVadis rates the company’s performance as ‘advanced’ in all four categories assessed – Environment, Labour and Human Rights, Ethics, and Sustainable Procurement. Pastor says these principles are a “critical element” of her company’s strategic plan. “We’ve integrated them into all aspects of our supply chain activities—from sourcing to customer delivery,” she notes.
Eric Rutter, President of the Americas for Technicolor Connected Home, cautions that these rising customer expectations have nevertheless collided with supply chain disruptions. Critical component shortages and logistical disruptions have hampered the flow of goods and services through the value-chain, he says, increasing pressure on decision-makers as they introduce and deploy new customer experiences.
“Success – and out-of-the-box thinking – in this volatile environment will hinge on understanding the underlying long-term trends while managing the more immediate short-term forces that will impact the market through 2022 and 2023,” he says. “Effectively navigating these intricacies will be critical for service providers serving connected home markets.”
Rutter notes that the market is competitive and customers remain price-sensitive, but says they have demonstrated a willingness to pay for better experiences – not least because so many are working from home, educating their kids from home and performing more life functions digitally. “The only way to navigate this environment is by adopting a comprehensive strategy of innovation across all operations,” he argues, adding that Technicolor Connected Home puts great emphasis on ensuring its products make it to market at the right time, the right place and the right price. He cautions that despite the challenges, the industry cannot afford to become distracted and must double down on bringing new value-propositions to market.
Despite the constraints, both Rutter and Pastor are bullish about the year ahead both for their company’s opportunities and for their CSP partners. “We now operate in an environment that doesn’t tolerate a lot of compromises,” says Rutter. “While the industry continues to deal with difficult supply chain issues, the imperative to innovate and create new value propositions in a cost-effective manner isn’t going away. The industry cannot afford to let the urgent distractions of the day disrupt the focus on bringing new exciting value-propositions to market.”