Deutsche Telekom and Orange said they will work together to present a united front in the scramble for share of the emerging Internet of Things market, particularly in the home.
Failure to immediately seize the opportunity in the IoT will see them “eaten alive” by US technology firms Amazon, Apple and Google, an executive from the Germany-based operator said at the European Communications/Mobile Europe IoT Conference this week.
Jon Carter, UK Head of Business Development and the Connected Home at Deutsche Telekom, remarked: “There’s a very real risk telecoms operators just won’t be in the game in the next five years. They’ll be completely ignored.
“Once Amazon’s Echo, and things like that, start to gain traction, then this market will kick off. We’re sure of that. The concern is we, as operators, don’t even feature in the conversation.
“We have seen it before. Unless we grasp this opportunity, we will repeat the mistakes of the past.
“It doesn’t have to be that way. This industry has to work together.
“If we exist in silos, and fight one another, we’ll be eaten alive by the likes of Apple, Google and Amazon.
“We have to find a solution that doesn't concern Brussels, and doesn't undermine our own ambitions to lead the market.”
Deutsche Telekom and Orange currently have distinct smart home platforms, with the former looking for Europe-wide support from its peers for its Qivicon system, and the latter going it alone with its HomeLive proposition in France.
Meanwhile, Telefónica has launched app-controlled home security system, Movistar Verisure Hogar, a re-badged version of AT&T’s successful Digital Life platform in the US.
Asked specifically if the pair, as well as the broader European operator community, would work together in a formal arrangement around IoT in the home, Carter said: “There is a compelling opportunity for European operators to work together. We are very clear on that.
“But we have got to work out the architecture and controls, and where the value lies. But there are lots of discussions.”
Patrice Slupowski, VP of Digital Innovation at Orange, responded to the same question: “The short answer is ‘yes’; the longer one is ‘absolutely’. But there are 80 telcos in Europe, so the number of possible combinations and alliances is huge.
“It’s like trying to organise a night out with 80 friends. It’s not straightforward, but we are having conversations that will transform into actions, for sure.”
Slupowski said the GSMA, as well as other organisations, including the US technology giants, will be involved also.
“It doesn’t mean we won’t work with these companies. We are already doing things with them, of course,” he said.
Fewer than five percent of European homes have some kind of smart home system, according to Carter. “European telecoms operators are capturing absolutely zero of that,” he said.
The number of connected devices in the average home will jump from around 10 today to hundreds in less than 10 years, with security-based wireless solutions representing the biggest opportunity, followed by energy management, according to the executive.
Further, up to 10 million homes in the US have some form of security and home monitoring, delivered by telecoms providers.
AT&T’s Digital Life platform has an installed base of around 450,000.
As it stands, about two per cent of homes in Germany and 11 percent of homes in the UK are hooked up to such systems.
“Europe could achieve 25 percent penetration,” said Carter.
“All the major manufacturers plan for all their portfolios to be connected. They want scale. They want a single platform, or four or five at most; they don’t want hundreds.
“The problem is not the lack of standards; it’s the fragmentation.
“Every major insurer in Europe, practically every utility and every major retailer has a well articulated plan for IoT; they all want to be in this space.
“The risk is telecoms operators will be completely ignored because they aren’t coming up with any solutions.
“They’re all looking for someone to help them through. Those that are succeeding, at the moment, are the ones with the loudest and shiniest solutions.
"They say, ‘well, we’ll go with you then’, and they’ll just put HomeKit into their washing machines.”
He added: “Deutsche Telekom is determined to see that change – for the whole telecoms market, and not just us.
“Today, telcos don’t grasp what a really serious opportunity this is. The tech titans on the west coast have a very clear focus, and unless something changes, European telecoms will be left out.”