Deutsche Telekom is bringing its smart home platform to the Netherlands and UK as it looks to take a lead in the connected home space.
Jean Kiessling, Head of Business Development for DT’s Qivicon smart home platform, told European Communications that it will launch in both markets this year.
The Germany-based operator launched Qivicon in its home market in September 2013 and talked up expansion plans last year.
Kiessling said the Netherlands will get the platform first, probably in Q2, with the UK following in the second half of the year.
DT is also looking at possible launches in Italy, Scandinavia and Spain in the future.
Qivicon is an open platform onto which third parties can build connected home services. DT has signed up 36 partners so far - Huawei and Netatmo were the latest to be announced last December.
Kiessling says this number is “by far not enough”. He adds: “We need more OEM products to be integrated, more marketing, sales, distribution partners.”
In particular, Kiessling is focused on persuading retailers of the value of Qivicon.
“They have a strong right to play,” he says. “Rather than selling their own smart product, cannibalising their relationship with their own customers, we can provide the platform [onto which] they can sell a smart product and add value [through the Qivicon ecosystem].”
DT takes a royalty fee according to the number of active users. Kiessling says: “For [retailers] it would be cost of sale – it’s very attractive.”
In addition, DT is targeting energy suppliers and other telcos.
Wearables will be big driver of future demand, Kiessling predicts, but the space is still searching for a killer app.
Four of the 36 partners have launched commercial services on Qivicon in Germany, where DT says it has fewer than 10,000 users.
Kiessling says energy management is the most popular service for customer in its home market, particularly heating.
The operator is competing with energy provider RWE, the current market leader, for control of the connected home.
Kiessling claims DT is on track to overcome RWE at current growth rates.
The exec refuses to discuss financials. “We’ve been circling round how to make this commercially viable for three years now,” he admits.
The original pricing model – a €299 starter pack – has changed. “We now have multiple offerings... as customers don’t want to buy a fully-fledged solution straight away,” explains Kiessling.
An energy management package is now available for €99.
DT will change the pricing model as it enters new markets. Kiessling says users in the UK, for example, prefer a rolling monthly fee rather than a one-off payment.
DT is not the only telco looking at this space, but is the only one that has gone out on a limb with its Android-like partnership model.
Last September, Telefónica announced it is to conduct a limited trial of AT&T’s connected home platform in Europe.
Other operators are developing more localised solutions.
All are aware of the spectre of Apple’s Homekit, which is yet to be launched.
Although Kiessling says it will undoubtedly be a big driver in the connected home space, he thinks the market is big enough for up to five different platforms in Europe, with fewer than 10 globally.
Can DT and other telcos compete?
Mark Billige, Managing Partner UK for consultancy Simon-Kucher & Partners, says it is a tough play for them.
“It’s a complicated world with so many players... the belief that [a telco] brand will extend there is not guaranteed,” he says.
“There are no concrete RoIs... telcos have to sort out revenue model. They have to ask: What is the value proposition? What problem am I solving?”
Billige warns that telcos have no right to play in this space. He cites the example of energy provider Npower and the Google’s Nest who have teamed up in the UK to reduce energy costs for consumers.
“You don’t need a telco, that’s the problem,” says Billige.
Darshan Shankavaram, VP & Head of Digital Center of Excellence, DCX & Mobile Solutions at Capgemini Group says they have no choice but to try and gain a piece of the market.
He says: "The need for telcos to monetise the IoT is clear. Existing wireless data and voice capabilities are now providing a diminishing scope of value and are being pressured by disruptive third party digital communication services.
“Operators have a strong impetus to become integral providers within the IoT space, but must act quickly if they are to avoid being circumvented by technology manufacturers and service aggregators who are gaining relevance in this market.”
If any of the operators are going to succeed, DT looks as if it will provide the benchmark.