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Q: We have had yet another eventful year in 2022. How are you seeing consumer behaviors change as we move into an economically uncertain 2023?

Leopold Diouf: The global economy in general, and the connected home sector in particular, is going through a significant transition as we move into the post-COVID era. While the industry was quite dynamic in the years leading up to 2020, when the pandemic sent the world into crisis, no one could have predicted the unprecedented surge in demand for broadband access and digital entertainment services. Nor could anyone have anticipated the supply-chain collapse that challenged NSPs’ — and their ecosystem partners’ — ability to meet the connected home demands.

So much was going on at once. Many nations released financial resources to protect citizens whose lives were disrupted by the pandemic, further stimulating demand for connectivity and digital services — from telework and telehealth to online education and fitness.

The business landscape has abruptly changed. While constraints on the supply chain have begun to ease, concerns about inflation and global recession are rising.

In response, consumers are now more price sensitive than before the pandemic. They are engaging in money-saving activities while attempting to maximize their access to a wide array of online services.

For instance, many subscribers now may sign up for a particular piece of content and then cancel after enjoying that single experience. From a broadband access perspective, customers are also more open to changing carriers if they can stay connected and save money.

This has made churn avoidance — or at least churn mitigation — a top priority for NSPs and OTT service providers for 2023.

Q: What is the key to reducing churn? How is the industry responding to this fickle consumer behavior?  

Diouf: The high churn level is changing the market’s fundamental economics. The challenge before operators is to determine how best to ensure that average revenue per user (ARPU) is maintained to support investments that NSPs make in network infrastructure and customer premises equipment (CPE) as well as strategic partnerships and emerging services.

Managing these variables in 2023 will be incredibly challenging, given how nomadic customers are today. That said, service providers can glean important insights into what it takes to maintain or enhance competitiveness by focusing on — and understanding — ARPU.

ARPU can serve as a reference point as NSPs explore how new relationships with entertainment and smart-home service providers can make their overall value proposition to subscribers more compelling.

From a CPE perspective, the key is platform flexibility and enhanced functionality. It is a strategy that allows NSPs to optimize engagement with subscribers cost-effectively. It also provides the foundation for introducing new products, upgrading existing offerings and rolling out services offered by emerging best-in-class service providers without changing the equipment already deployed in the market.

CPE strategies throughout 2023 will also have to deliver robust and intelligent capabilities because it is no longer enough to connect to ultra-wide broadband GPON, DOCSIS — or even 5G FWA — networks. Successful connected-home strategies will hinge on the ability to manage the rising digital complexity that is unfolding throughout homes worldwide.

NSPs that establish themselves as the trusted providers — and managers — of consumers’ digital lives will gain a strategic advantage, creating new opportunities to drive greater consumer satisfaction and engagement.

Enhanced video, Internet-of-things, remote health and security services are all additional services that can be integrated and dynamically updated when intelligent, open CPE platforms are present in the connected home.

Q: How important is it for these different services — including remote health services, gaming or new IoT services — to be pre-integrated into intuitive CPE?

Diouf: Pre-integration of these types of services is vital. The question is: how will NSPs do it?

Looking at the market today, some NSPs may choose to build their own set of discrete telehealth, security, or home-management solutions. It is, however, an expensive strategy that often ends up drawing scarce resources away from the core competencies of NSPs.

That is why a growing number of NSPs are turning to best-in-class services offered by leaders in specialized fields to enhance the connected home experience.

This strategy assumes robust CPE is in the home to “host” these value-added services. Beyond providing these services with a presence in the home, next-generation CPE strategies will also play a critical role in making it easy and intuitive for users to access and manage new features and functions.

Nowhere is this more true than managing Wi-Fi connectivity throughout the home. The steady rise of personal devices and smart appliances that require internet access has created a complexity that is extremely difficult for the typical connected-home subscriber to manage. CPE strategies that leverage machine learning and artificial intelligence to manage these services without human intervention can address this complexity. And when problems reach a point where calls to customer service representatives are required, intelligent CPE will offer the clarity needed for remote support teams to resolve issues quickly. 

This is all much easier said than done. But if it is accomplished, it allows more subscribers to understand the services offered and increases willingness to sign up — and stay — with their “enhanced” network service providers.

Q: What role do industry and technology standards play in this strategy?

Diouf: Industry standards play a critical role in the process. They are the key to deploying open platforms, enabling NSPs to add services across video and broadband CPE easily and cost-effectively.

It is why VANTIVA has spent years contributing talent, technology and financial resource to initiatives with OpenWRT, RDK-V, RDK-B, and we have started investing in prplWrt. Our commitment to industry standards is also why VANTIVA is the leading provider of Android TV CPE for the connected home community.

Q: As we look at 2023, what can the market expect to see from VANTIVA?

Diouf: The market will see VANTIVA double down on strategic relationships with NSPs and other important players in the market.

There are so many things that contribute to successful technology and services deployment to the home. The most crucial factor is the effectiveness and efficiency of the ecosystem that ultimately delivers products and services to subscribers.

Competition in the connected home market is increasingly driven by how well players across the value-chain work together to create high-value cost-efficiently. It is a team sport that requires specialists to map their innovations to a common repository of value.

For the connected home market, that repository is the CPE.

That is why VANTIVA has spent years refining and perfecting relationships with its HERO Partner Program participants. It is how we can offer an integrated set of peerless security, gaming and health applications — to name just a few services — that are seamlessly integrated into open, robust and intelligent CPE offerings.

Open platforms allow the development and deployment costs to be shared across the entire community, which — over time — enables VANTIVA to support NSPs in deploying tailored services at a rapid pace.