Global Broadband Market to Reach $363 Billion

Home devices are not only accelerating in number, but are also evolving rapidly to include more screens and more advanced technologies such as 8K video and XR technology, all of which will place higher demands on broadband networks. Broadband remains an important source of revenue for telecom operators, with the global broadband market size reaching $363 billion by 2028, a five-year compound annual growth rate of 4%.

Broadband remains an important source of revenue for telecom operators, with the global broadband market size reaching $363 billion by 2028, a five-year compound annual growth rate of 4%. As operators focus only on speed, ARPU values ​​are difficult to grow. Therefore, unless operators can change their strategies, revenue growth will stagnate as user growth stagnates. To do this, operators must shift from focusing only on speed to focusing on the overall quality of experience (QoE).

Home Wi-Fi is critical to any broadband growth strategy. For broadband operators to successfully increase ARPU values, they must provide consumers with an optimized broadband experience. Failure to do so will result in increased customer churn and severely limit further upsell opportunities. However, without a highly advanced home Wi-Fi platform, operators will not be able to deliver optimized QoE.

As a result, operators around the world have invested in home Wi-Fi gateway capabilities to improve home broadband and Wi-Fi capabilities.

One goal of this strategy is to support the latest Wi-Fi standards. As of Q1 2024, 85% of operators tracked by Omdia are supporting the latest Wi-Fi 6 or 6E standards in their top gateway options, and 8% of operators are already offering Wi-Fi 7, even though Wi-Fi 7 has just been officially standardized on January 8, 2024.

As home Wi-Fi technology becomes increasingly important, many operators are now looking to monetize gateways in various ways. The two most popular models are to charge a surcharge for more advanced gateways or to offer advanced gateways in the top broadband service tier to encourage more users to upgrade their broadband services. The vast majority of operators (87%) also offer additional advanced hardware options, such as Wi-Fi extenders.

Most operators tracked by Omdia offer a home Wi-Fi app, and the features provided through the app are constantly expanding. In addition to common features such as Wi-Fi management, guest access and parental controls, other features such as built-in speed testing, whole-home/IoT network security and endpoint/application prioritization are becoming increasingly popular. Gateway sustainability has also become a hot topic in the past 12 months, especially in Europe. A quarter of telecom operators tracked by Omdia have launched some kind of sustainability feature in the market, but 92% of them are located in Europe.

Recommendations:

Broadband operators must focus on QoE, not just speed. For the services provided by operators, speed is only one metric that consumers value. Speed ​​alone does not guarantee a good user experience or contribute much to service differentiation. By focusing on having good QoE for the applications that consumers value most, operators can truly differentiate themselves and find new ARPU opportunities.

Don't just focus on Wi-Fi hardware. To achieve a truly premium experience, investing in home Wi-Fi is essential. Many operators believe that this means investing in the latest Wi-Fi standards and additional equipment such as Wi-Fi extenders. However, new/additional hardware often does not significantly improve the consumer experience and in some cases can do more harm than good. To truly deliver a great customer experience, operators must invest in software Wi-Fi management platforms.

Ensure upsell opportunities. Clearly, to maximize customer satisfaction and differentiate the operator’s brand as much as possible, technologies and software features that improve QoE need to be promoted to all customers. However, operators need to be careful not to blindly undermine future ARPU growth strategies while maximizing customer satisfaction. Operators must plan carefully to ensure the right balance between customer satisfaction, brand differentiation, and ARPU growth.

Focus on sustainability of home Wi-Fi. For a single home, gateway energy consumption will not be significantly reduced. But at the operator level, gateway energy consumption accounts for about one-third of the total network energy consumption. As customers upgrade services or switch operators more frequently, the replacement cycle of the equipment itself is also shortening. Therefore, every effort must be made to make gateway equipment as sustainable as possible while maintaining the desired customer experience.