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  4. > Home Networking: Growing Consumer Expectations and Operator Opportunities

In this report, we will explore the home networking environment through the responses to a recent Stratecast survey by over 1,500 interview subjects. The results will be of interest to network operators and those who provide them with technology.


Executive Summary

The cornerstone of the connected home is the home network. Content stops at the set top box,
voice traffic stops at the network interface device (NID), and telemetric services such as home
security systems never leave the home unless there is an infrastructure to carry the signals. Not just
any infrastructure, either: as everything becomes digital and speaks a common data transfer language,
the home network must be able to route traffic to the appropriate devices. In many respects the
home network is becoming at least as complicated conceptually as business data networks.

Consumers are beginning to notice: as the complexity of the home computing and communications
environment increases, the likelihood that the average consumer will actually be able to make it work
decreases. Operators are finding that an increasing percentage of their trouble calls are being
generated by issues stemming from the home network.

On this backdrop, it is ironic that operators, by and large, do not support the internal home
networking environment. At least they aren’t prepared to extend support beyond the set top box or
wireless router. Many, in fact, define the home network AS the wireless router.

As the home network supports an increasing number of devices, consumers are finding that loading
issues are beginning to impact their quality of experience, and many are turning to higher broadband
access speeds in an attempt to improve the performance of their home environment. It is interesting
that the driver for this broadband speed increase is not to stream video, as one might expect, but
simply to improve Internet browsing.

Survey data support the notion that consumers are ready for comprehensive support from their
network operators. If operators were able to provide installation support and ongoing remote
support for the home network, the latest Stratecast survey indicates that as much as 49 percent of
those surveyed would buy it: a substantial percentage that indicates an unfilled need.
This year’s review of the home networking space, then, is an example of good news / bad news:
home networking could be a substantial opportunity for operators or it could be a nearly
insurmountable stumbling block to generating revenues above what the current consumer
communication services wallet will support. Operators’ financial margins will increasingly be
determined by consumers’ perception of ease of use and fair pricing. When home network problems
make the next advanced service offering difficult to use or seem unacceptably high in price (due to
support issues), operators will find that they simply cannot sell additional services.
Ultimately, someone will support the home network, and will buffer the consumer from the
complexity of communications. Whoever does will become the gatekeeper for the connected home.
Will it be the network operator? The verdict is still out.

Table Of Contents

Home Networking: Growing Consumer Expectations and Operator Opportunities
Table of Contents


Executive Summary 4
Introduction 5
Home Networks: State of the Art 6
Home Network Penetration 7
Characteristics of the Home Network 8
Driving the Home Network: Broadband Access Speed 13
Network Operator Opportunities 16
The Last Word 20
List of Figures
Figure 1: The Home Network 6
Figure 2: Home Network Penetration (North American, 2014) 7
Figure 3: Home Network Penetration by Age (North America, 2014) 8
Figure 4: Home Network Components (North America, 2014) 9
Figure 5: Number of Devices on Home Network (North America, 2014) 10
Figure 6: Average Number of Devices on Home Network by Age (North America, 2014) 10
Figure 7: Average Number of Devices on Home Network by Income (North America, 2014) 11
Figure 8: Wi-Fi Technology in Use (North America, 2014) 12
Figure 9: Wireless Router: Leased or Purchased (North America, 2104) 12
Figure 10: Home Automation Technology (North America, 2014) 13
Figure 11: Reasons Given for Needing Higher Access Speeds (North America, 2014) 14
Figure 12: Willingness to Pay for Higher Bandwidth in Order to Stream 15
Figure 13: Internet Connected Television by Income (North America, 2014) 15
Figure 14: Desire for Home Network Installation Services (North America, 2014) 17
Figure 15: Desire for Home Network Installation and Support by Income 18
Figure 16: Desire for Home Network Installation and Support by Age 18

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