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Cable Technology Feature Article

October 09, 2013

US Cable, Telcos Diving into Home Security, Automation, Even Over the Top

By Gary Kim, Contributing Editor

Without question, U.S. cable TV companies and telcos now believe home automation and security are reasonable new fields for revenue growth, building on existing customer relationships and network services.

Such businesses, while perhaps not of so much interest in a pre-Internet era, and in an era where other revenue opportunities simply were vastly larger, have become more important as legacy revenue sources have begun to wither.

Smartphones and broadband also change the end user experience in ways telcos and cable companies can take advantage of. Some new features, especially the use of cameras, now are possible.

Ease of use also is a new factor, given the ability to control home systems using a smart phone or tablet.

The U.S. market arguably also is among the most lucrative globally. In terms of revenue generation as of 2011, North America held the highest share of revenue, at about 56 percent, followed by Asia-Pacific at 28 percent, according to Marketsandmarkets.com.

The global home security solutions market is expected to grow from $20.64 billion in 2011 to $34.46 billion in 2017 at a compound annual growth rate of 9.1 percent from 2012 to 2017.

One new wrinkle is providing such service over the top and outside a provider’s network footprint.

“One of the more interesting trends we’re seeing in the home automation market is the concept of a provider offering services to end customers over another operator’s broadband connection,” said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research (News - Alert). “Verizon has been experimenting with trials of over-the-top (OTT) home automation services as a way to secure revenue from out-of-market customers.”

“Our latest home automation study supports this trend: By 2015, the percentage of operators offering OTT home automation services more than doubles,” Heynen said.

Over 70 percent of the operators participating in Infonetics’ survey will offer home automation services by the end of 2013.

Edited by Rachel Ramsey

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