[This blog is the final in a five-part series based on the Maravedis report “From Managed Home Wi-Fi to Enabling the Secure Smart Home 2018-2023”. Read the previous blogs here.]
With the proliferation of devices, the home is rapidly becoming a dense environment requiring a new level of Wi-Fi performance and coverage. The wireless footprint of these devices varies considerably and, unless some order is established, is a sure way towards an inconsistent Wi-Fi experience. Wi-Fi performance, and by extension the user experience, will suffer due to many environmental factors, such as congestion, noise, and interference.
As dicussed in our report “From Managed Home Wi-Fi to Enabling the Secure Smart Home 2018-2023”, typically, users are unable to differentiate between problems caused by Wi-Fi, and other problems in the access network, or in the underlying applications. As a result, service providers are now increasingly taking ownership of the Wi-Fi experience and are on a mission to educate their customers and manage their Wi-Fi experience for them. To this end, while some carriers sell home Wi-Fi as a service, others include it as part of their normal broadband service at no additional cost.
For each of the operators included in our forecasts, we built forecasts for the following two categories:
- home broadband lines with home managed Wi-Fi with penetration rates; and
- average number of devices providing connectivity (e.g., gateways, extenders, STBs, and repeaters).
The licensing models and the average licensing fees vary considerably per deployment scenario between the agents deployed on third party gateways, fully integrated solutions (hardware and software), solutions with mesh, solutions with Power Line Communication or wireline backhaul, hosted solutions on AWS (OpEx), or purchased with a perpetual license (CAPEX). Consequently, we limited our forecasts to the number of licenses and units rather than dollars. Few vendors were willing to disclose how much they charge their customers for those licenses, which rendered any revenue forecast more than an educated guess. Most vendors are still private companies with no obligation to report revenues. Said differently, we asked and got few detailed responses. However as shown in the methodology flow below, our internal model provided an elegant and robust basis to derive the number of managed access points starting with the number of fixed broadband lines per operator for the top 34 countries modelled.
According to the latest research from Point Topic, as of the end of September 2018, there were more than one billion fixed broadband subscribers worldwide.
The growth is mostly due to the trends in East Asia, which provided 70% of all net additions in fixed broadband subscribers. Almost 50% of all subscribers were also in East Asia, which includes China. The graph below shows that Asia represents more than one third of worldwide broadband subscriptions.
“Fixed internet access continues to exceed expectations with growth tracking ahead of most models. Driven by China and other Asian markets the second age of internet expansion is nevertheless showing the effects of market saturation. The next phase will seek to provide adequate access to those in the places hardest to reach” according to Oliver Johnson, CEO at Point Topic.
Those broadband trends have of course direct implications on home Wi-Fi. The faster the pipe to the home, the greater customer expectations who expect those speeds to be delivered right to their devices in the home.
As a result, Managed Wi-Fi is a fast-growing market. We forecast that, by 2023, over 140 million broadband lines in the top 34 countries worldwide will have service provider-managed Wi-Fi. This represents 14% penetration of the total broadband lines in service in 2023. Below are some charts taken from the report, values have been removed but the trends are clear. To take advantage of the detailed value, please refer to the full report.
Not surprisingly, Asia represents the largest market for both fixed broadband and managed Wi-Fi followed closely by Europe and North America as shown in the following exhibit.
We believe that the adoption of guest Managed Wi-Fi is led initially by a few large fixed operators such as Comcast, Liberty, Orange, or DT who have embraced the notion that Managed Wi-Fi makes sense both strategically and financially. Managed Wi-Fi is poised to help operators reduce their Opex, Capex, and increase revenues with the sale of additional bandwidth or repeaters. Other operators are watching and evaluating their best technology choices in light of the proliferation of IoT, the emergence of Wi-Fi 6, and the overall role of Wi-Fi in the 5G era.
When it comes to Managed Wi-Fi, Calix has worked with dozens of service providers, offering them a Carrier Class Wi-Fi solution that includes the Calix GigaCenter, Calix Support Cloud, and Calix 804Mesh satellite units.
To learn more about how Managed Wi-Fi serves as the foundation for capturing the smart home opportunity, join our webinar with Amazon and Broadband World News. Register here.