Vodafone has launched its V-Home smart home-as-a-service (SHaaS) offering in the UK and Italy, following a launch in Spain in May and Germany in June. The MNO is the latest entrant into this nascent market, but will have to battle against the consumer offerings from the likes of Google and Amazon – the latter just sold a million smart home devices during its Prime Day promotion.
For service providers – mostly TV providers, fixed-line ISPs, and MNOs – an SHaaS offering can massively increase customer retention, preventing them from churning away to the competition. The service is also a way to address what looks like clear, if not massive, consumer demand for these systems, and the operators are well-placed here thanks to their existing relationships and their CPE footprint.
However, while extracting an extra $10 to $30 a month from a customer is a fine prospect, the SHaaS market has been incredibly slow to take off. Comcast and Deutsche Telekom have been the leaders here, though we could date the market to the first Nest deployments back in 2013. Now, five years later, the number of operators providing SHaaS at scale can still be counted on one hand.
This is somewhat perplexing, as a well thought-out SHaaS bundle should be a clear win. The hardware is there, and the software back end isn’t onerous, and if an operator doesn’t want to do everything itself, there are numerous companies that could be partnered with. If successful, the SHaaS bundle provides an immediate uplift to ARPU, and assuming it’s stable, a likely improvement in the brand value to the customer. It seems that the telcos have missed an opportunity to get in early and keep the likes of Google and Amazon out.
There’s so little competition in this market that there’s still no clear ‘typical’ pricing. Vodafone’s packages vary quite substantially according to market. In Italy, the starter kit that includes a Samsung SmartThings WiFi Hub, a connected security camera, a smattering of sensors, and an alarm, will cost €350 upfront and then €7 per month.
Deutsche Telekom’s pricing is closer to €10, and over in the US, it’s easily double that.
The Italian V-Home bundle also allows Zurich Home insurance to make three professional interventions a year, meaning that Zurich can arrange for visits from plumbers, locksmiths, and glaziers, should the need arise. For insurance providers, the data generated from these sorts of devices can help them intervene before a small problem becomes a much larger one – significantly reducing their exposure.
Vodafone’s partnership strategy is also reducing its development exposure, as it should be able to leverage Samsung’s existing SmartThings experience. The likes of Comcast and Deutsche Telekom have R&D costs to recoup along the line, and while there’s the risk that a supplier could go bust or throw in the towel, the V-Home brand should be able to transfer between the devices without too much issue.
In Spain, the Vodafone pricing is pretty similar, although the Safety Starter Kit is only €300 upfront, but more expensive per month – at €11 on a two-year contract. Notably, Vodafone will sell V-Home to customers that use other suppliers for their home broadband. In the UK, Vodafone’s pricing is more expensive per month, at £14, but its starter kits seem cheaper, at £100.
Vodafone has an exclusive European deal with Samsung, to supply the SmartThings devices for its SHaaS. In Germany and Italy, Vodafone will now be competing with Deutsche Telekom, at pretty comparable price points. As it stands, these two are leading the charge in Europe, but it seems like there’s been a huge missed opportunity for the CSPs to secure a market before the likes of Amazon and Google can leverage their huge web platforms to shut them out.
Outgoing group CEO Vittorio Colao, said: “The Internet of Things is already transforming the world of work; now, it will transform the home. ‘V-Home by Vodafone’ makes it easy for consumers to protect family and property and enhance home life with innovative technologies underpinned by the strength of the Vodafone network. We are pleased to work with Samsung to bring these benefits to our customers.”
DJ Koh, president of Samsung Electronics’ IT and mobile division, said: “Samsung is committed to offering our consumers an easier, more convenient and smarter life through a growing range of devices and solutions. By bringing together V-Home by Vodafone, the SmartThings open platform and our SmartThings app we are offering customers a simple-to-operate management system for a growing range of smart home products that will enrich their lives.”