Springing the Smart Home Service Trap

Every ISP and telecom executive I speak to recognizes the potential of smart home technology as a new avenue for growth and customer engagement. Smart device adoption continues to rise across all consumer demographics, with the average U.S household now home to more than 20 connected devices. For communication services providers, the big question is not “Will the smart home have an impact on my business,” but “How can we stay competitive and meet evolving customer demands?”

Service providers have had mixed success with smart home technology. While they have the advantage of existing infrastructure and customer base, the transition hasn’t been without challenges. Previous service offerings have struggled because the selection of supported devices was too narrow, integration and interoperability between devices was a hurdle, setup and maintenance were too much of a hassle, and costs were too high. The industry has learned from these efforts: We now know consumers will choose their own devices and add them to the network at will. CSPs can offer tremendous value not by selecting devices for their subscribers, but by making it easy to coordinate those devices in experiences that improve the safety, comfort, and convenience of their homes.

This approach requires providers to welcome a broad ecosystem of smart home devices into their service offerings – and that poses a challenge. How could any CSP possibly maintain the required knowledge base for such a wide variety of devices, not to mention the trained service and support staff to use it? That question once seemed near-insurmountable, but now, the answer is plain. We can streamline and automate smart home service provisioning and support with AI playing a pivotal role in reducing friction for both service providers and consumers.

The challenges of smart home provisioning

When consumers bring their own devices into the mix – everything from thermostats to smart speakers – the challenge of interoperability and managing multiple protocols becomes daunting. The diversity in device ecosystems, including Matter, Z-Wave, Zigbee, Bluetooth, Wi-Fi, and more, often results in compatibility issues that disrupt user experiences.

Even with standard protocols, there’s still a high degree of nuance with respect to device interoperability. For instance, while two Z-Wave devices may theoretically communicate, variations in implementation can break the user experience, like when one brand adds extra features that others don’t support. The lack of interoperability leaves the smart home fragmented, with most users managing their devices using a library of branded apps.

For most of the history of smart home technology, true smart home experiences have been so far out of reach for the average consumer as to be unimaginable. They value individual smart devices for the convenience and functionality they offer, but they don’t value or even know all the ways these devices can work together. CSPs now have the power to change that paradigm: with a holistic approach to provisioning and management, they can transform their customers’ residences into the intelligent homes of their dreams.

The future of smart home setup

One of the most exciting developments in smart home provisioning is the concept of seamless integration for a non-technical smart home user. Service providers are keen to offer customers a smooth experience where they don’t need to juggle multiple apps. A modern Smart Home as a Service app should automate device discovery and integration so users can set up complex automations like wake-up routines with just a few taps. This style of true home automation has only been available to professionally integrated smart homes or though hours of programming by do-it-yourself enthusiasts. Now, these seamlessly orchestrated experiences are available to everyone.

The power of AI in provisioning and support

AI is at the heart of future smart home service provisioning solutions. AI assistants can perform a significant majority of time-consuming service tasks, including providing device-specific setup instructions, diagnosing and troubleshooting errors, and setting up automations.

For service providers, AI offers a unique advantage: the ability to replace human tech support for many common issues. Imagine being able to ask, “Why didn’t my lights turn on when I walked in the room?” AI can instantly check the sensors, the device logs, and more to give you an answer faster than any human support agent could. This technology will drastically reduce the volume of support calls CSPs must field to offer smart home services and improve customer satisfaction as well. AI offers predictive maintenance features. Right now, companies are developing systems that will detect potential issues, like low batteries in sensors, before they fail. This proactive support is key to reducing downtime and providing peace of mind.

Beyond maintenance, AI-powered smart home assistants help service providers build stronger relationships with their customers, leading to increased loyalty and retention. When you’re at work or on vacation, you’ll be able to ask your assistant to send you a notification when your kids get home or if your garage door has been open for more than thirty minutes. A smart home AI assistant is more than a gadget feature – it’s a valued helper in managing your home and taking care of your family.

Viable business models for smart home services

Beyond the technical challenges, there’s a growing interest from ISPs and other service providers in exploring viable business models for smart home services. Many are considering whether to integrate smart home management as part of their existing offerings or to sell it as an add-on service.

Currently, there are two primary models emerging. Some providers may want to install smart home capabilities across all their routers, giving every customer the opportunity to opt-in through their app. For service providers, the cost of this approach can be as low as pennies per router per month. On the other hand, there’s the activation model, where customers pay a monthly fee to access smart home management services. The per-subscription cost is higher, but there’s no risk of investing in a service your customers aren’t using.

In either case, CSPs see the potential to reduce customer churn as a strong motivator for implementing smart home service offerings. When you provide the brain that runs a customer’s home, and an AI-powered app that your subscribers interact with on a daily basis, it’s very difficult for a competitor to swoop into your territory simply by undercutting your prices. What’s more, by leveraging AI to handle a majority of tier one service requests, the cost of smart home service provisioning is so low that even a slight reduction in customer churn can more than offset it. Which is to say: most CSPs could feasibly offer smart home services to their customers for free and still realize an increase in net revenue.

The future of smart home service provisioning lies in AI-powered solutions and seamless integrations that simplifies the experience for both service providers and consumers. By focusing on interoperability, predictive maintenance, and automated support, providers can improve customer satisfaction and unlock new revenue streams with minimal service provisioning costs. In the increasingly competitive and commodified network services market, this is an opportunity for differentiation that service providers cannot afford to miss.

The views expressed in this article belong solely to the author and do not represent The Fast Mode. While information provided in this post is obtained from sources believed by The Fast Mode to be reliable, The Fast Mode is not liable for any losses or damages arising from any information limitations, changes, inaccuracies, misrepresentations, omissions or errors contained therein. The heading is for ease of reference and shall not be deemed to influence the information presented.