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CES 2023: Local Reactions to Global Economic and Geopolitical Forces Define Regional Trajectories of Connected Home CPE in 2023

By: PRLog

LAS VEGAS - Jan. 5, 2023 - PRLog -- CES 2023 -- The prospects of inflation and a global recession are a common variable that will influence how network service providers (NSPs) in different regions assess their strategic customer premises equipment options (CPE) for 2023. That said, local market conditions will determine the pace at which new technologies are deployed and new services adopted for connected home applications, according to Mercedes Pastor, Senior Vice President of VANTIVA's Global Customer Unit, in an interview with journalists during CES 2023.

"There have always been significant regional differences in how consumers receive connected home applications. In 2023, however, we will likely see more stratification across geographies as NSPs assess the specific impact that major economic and geopolitical events have on their markets," she says.

This, she explains, is because the defining characteristics of consumer demand have shifted. The market has moved from focusing on the consequences of a global pandemic -- which forced the entire world to shelter in place -- to the recessionary implications of the war in Ukraine, which has sparked inflation forces fueled by energy shortages affecting different regions in different ways.

"The farther you are from the center of the conflict in Europe, the less specific impact it has on consumer behavior," says Pastor. "As a result, local realities will take on a much higher profile in determining the appetite for connected home services in 2023."

EMEA Demand Softens Amid War and Inflation

The Europe, Middle East and Africa (EMEA) region is at the center of the geopolitical blast zone. Rising inflation and economic uncertainty have been especially severe here.

"In Europe, for instance, NSPs are starting to see bigger challenges and reduced demand for connected home services. This is in contrast to the growth that occurred during the COVID-19 crisis. The impact on energy costs, currency impact, interest rates and derived inflation have presented new challenges for the business plans of regional operators. Consumers are now very price sensitive," says Pastor.

That said, NSPs in the region continue to move full steam ahead with deployments of fiber infrastructure to continue supporting a workforce that continues to work from home and demand levels of connectivity that copper-wire infrastructure cannot deliver.

"Fiber will remain a major engine of investment for NSPs in Europe. And as more broadband capacity is brought into the home, consumers will expect support from NSPs in managing the complexity of devices and services within their households. This means we can expect to see supporting -- if not surging -- demand for CPE that integrates Wi-Fi 6E and emerging Wi-Fi 7 technologies," she says.

North America Addresses Churn Challenge

With the entire Atlantic Ocean separating Canada and the United States from the turmoil in Europe, consumers are dealing with the prospects of an uncertain economic future differently. The impact of inflation in North America, while a significant concern, is not being experienced as harshly as it is in Europe.

That said, the second half of 2022 saw U.S. subscribers dynamically churn in and out of over-the-top (OTT) digital entertainment services to manage budgets. They are also carefully considering -- and sometimes switching -- their broadband connectivity options if there is an opportunity to save money without sacrificing quality connectivity. This is because a growing number of alternatives are emerging.

"Cable providers in the region are preparing to migrate from DOCSIS 3.1 to DOCSIS 4.0, further extending the life expectancy of coaxial cable infrastructure -- which is not a major infrastructure factor anywhere else in the world," says Pastor.

"In the meantime, while telco providers are making significant progress in deploying 10GPON fiber, mobile providers are leveraging investments in 5G spectrum to offer competitive, connected home broadband services with a new generation of Fixed Wireless Access (FWA) offerings," says Pastor.

As in the European market, connected homes in North America are becoming more complex. There is no shortage of services or digital content offerings. Indeed, there are so many that it is often difficult for consumers to find the experiences they want to enjoy quickly.

"The number of connected devices and appliances in households across North America is exploding, creating demand for solutions that enhance the user experience with intuitive interfaces that work across the spectrum of connected home services," says Pastor.

Brazil and Mexico Set the Pace for Latin American Connected Home

Two bright spots for connected-home growth in Latin America are found in Mexico and Brazil. While neither country has been exempted from political turmoil or the effects of inflation, both have managed to maintain encouraging economic performance.

"The countries have remained diligent in pursuing aggressive infrastructure modernization initiatives, leading the region in fiber deployments. This is also creating demand for robust -- but affordable -- CPE that can capture fiber broadband access," says Pastor

Flexible, open and intelligent CPE platforms will provide a path for NSPs to further monetize their relationships with subscribers cost-effectively as these countries transition from their infrastructure-build-out stages to service enhancement phases.

Fiber Infrastructure Build Out in Asia Accelerates

Likewise, Pastor notes that similar investments in fiber technology are underway in countries across the Asia Pacific.

Indeed, recent projections from analysts suggest that the Asia Pacific is emerging as the fastest-growing fiber optics market. It is driven by fiber-to-the-home (FTTH) network deployments across economies such as China, India, Japan and Southeast Asia. It is also fueling demand for fiber-capable CPE.

All in all, observes Pastor, the connected home CPE market remains sizable and healthy but with important regional nuances.

"At VANTIVA, we see big opportunities for the connected home CPE in each of these markets throughout 2023. We will continue expanding our footprint and address the new year's unique challenges, just as we did with the global pandemic over the last two years. The crises may be different. But the resilience, flexibility and ability to adapt to changing conditions are embedded in our DNA," concludes Pastor.

To learn more, visit:
https://www.vantiva.com/activity/broadband/


Photos: (Click photo to enlarge)

Mercedes Pastor, Vantiva Pushing the Edge

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