NBN Co, in conjunction with Ovum, has released a report highlighting opportunities for service providers to innovate and profit from the rise of the 'connected home'.
The Ovum report, Home Automation: Overseas Successes and Australian Opportunities, provides an overview of developments in the Home Automation industry, examines potential market opportunities in Australia and details several case studies from around the world.
The case studies, which include Xfinity, Comcast and Orange Poland, showcase Service Providers successfully operating in the connected home market.
The "connected home" is concerned with the delivery of new, or more advanced, services into the home using IP-based devices, appliances and connectivity.
The common element linking all connected home applications is IP connectivity, which enables devices and other elements within the connected home ecosystem to communicate. The report said the 'connected home' was top of the agenda for telcos around the world with Google acquiring smart thermostat manufacturer Nest and predictions from Telsyte that device sales in the home automation market will reach $917 million by 2017 in Australia.
Ovum research director David Kennedy said the connected home had a whole category of emerging applications.
"In the coming years we'll see more sophisticated cloud-based applications that exploit IP-enabled devices," he said.
"These will anticipate householder behaviour to measure, manage and control energy consumption, and maintain security, whether the householder is present or not.
The RSP provides the basic IP connectivity, making it well-placed to drive innovation by aggregating these services in partnership with Over-the-Top providers who specialise in these categories.
Kennedy said a reliable and truly national high-speed broadband platform would allow RSPs to offer these services to the entire Australian market, increasing economies of scale and improving the business case for new services.
"There is no single killer app in the future but rather big ticket categories such as security and energy control," he said.
"Growing revenue in a mature market like Australia is about incrementally improving the service offer and allowing for new innovation and consumer experiences.
Kennedy said RSPs needed to develop a suite of services that deepen the relationship between their brand and the household to leverage this opportunity.
"This will generate customer loyalty between RSPs and their Australian households as they become more familiar with the apps of the future."
The report found connected home automation services had already been launched, and were achieving successes in markets similar to Australia's.
"Though these markets are still at an early stage, they have significant potential for growth," the report said.
"Sensor costs are falling, and sense/control devices will in due course be integrated into household fittings such as windows, doors, thermostats and air conditioning units.
"This will place these services within the reach of a larger and larger number of households and provide opportunities for telecommunications service providers."
The report said an important feature of the markets for the connected home was that they were successfully serviced by an ecosystem of partners, rather than a single, vertically integrated service provider.
"No single player currently has the capacity to deliver every element of the service, or to do so with the speed and specialisation needed to keep pace with the competition," the report said.
"The telecommunications service providers that have launched successfully have found a place in the ecosystem where their capabilities in IP connectivity, gateway control and billing have allowed them to deliver value to customers, even as they compete with some of these partners.
"As the home automation market develops in Australia there are significant opportunities for telecommunications services providers to share in the growth and develop additional revenue streams."