(Image Credit: iStockPhoto/Tuomas Kujansuu)
The Internet of Things (IoT) is moving quickly from concept to reality. At industry events, vendors showcase technologies that connect everyday objects and systems — from smart cars and m-Health solutions to connected homes and smart cities. Every participant in this ecosystem is working to secure a share of the expanding IoT market.
For carriers, participating in IoT means more than providing basic connectivity. To capture the business potential of smart home services, carriers must adopt a deliberate, strategic approach to service rollout, operations and customer acquisition.
Entering the smart home market opens a wide range of opportunities but also introduces a new set of risks.
Some major carriers already offer end-to-end IoT solutions. The smart home represents a clear use case that allows carriers to extend beyond traditional mobile services and compete with technology companies that have released sophisticated smart-home platforms and devices.
Still, carriers face specific challenges in becoming primary facilitators of smart homes and broader IoT deployments. These include building and managing new partner ecosystems, establishing operational and business processes tailored to smart-home offerings, educating the market, and — crucially — acquiring customers to increase market share.
When a carrier launches smart home services, it cannot assume customers will automatically see them as a natural provider for those offerings. Many consumers still view carriers primarily as mobile network operators, not as home-automation or connected-living providers. To succeed, carriers must change that perception and reposition themselves as comprehensive providers of connected services.
The key question becomes: once a carrier establishes a smart home ecosystem, how do they grow a customer base? A powerful answer lies in Big Data analytics.
Carriers must overcome distinct challenges as they transition to being smart-home and IoT service providers.
With Big Data analytics integrated into dedicated smart home solutions, carriers can analyze usage patterns and customer behavior to identify households most likely to adopt smart-home services. Analytics can reveal who customers are, their mobility and lifestyle patterns, data consumption, household size and other indicators that help build precise user profiles. Those profiles enable targeted marketing and higher conversion rates for smart home packages.
From a business standpoint, smart-home expansion creates significant revenue opportunities, but it also brings exposure to new risks. The IoT value chain introduces additional partners, dealers and service providers, increasing the potential for revenue leakage, billing errors and fraud. Carriers must anticipate and mitigate these threats to protect both revenue and reputation.
Combining Big Data analytics with specialized smart home platforms allows carriers to detect and respond to fraudulent activity, identify charging-chain mistakes, and close revenue gaps. These capabilities help prevent customer overcharging and the reputational damage that follows.
Equipped with a comprehensive smart home solution and an underlying Big Data platform, carriers can unlock the full commercial potential of the smart home market. They gain the insights needed to attract new customers, optimize offerings, and safeguard the business against operational and financial risks.
Should carriers change the perception that they are limited to mobile services? Share your thoughts in the comments.
If you want to learn more about smart homes and IoT developments, consider attending the IoT Tech Expo Europe taking place in London’s Olympia this December.