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Study: Service providers to carve out home networking niche

Tue, 01/21/2003 - 7:00pm
Duffy Hayes

As digital devices find their way into consumers' living rooms, and the gear connecting all of it continues to proliferate, service providers like cable and telephone companies will be in a unique position to help their subscribers set up and manage their new home networks over the long haul.

That's a conclusion reached by researcher InStat/MDR in a new study, "Connected Home Services: Service Providers Take on the Home Network." In it, InStat paints a future where service providers extend beyond their traditional demarcation points deeper into subscriber homes as a way of generating new sources of revenue from their customers.

Specifically, InStat (which is owned by the same parent as CED) predicts that the number of service provider-managed home networks will grow from just over 100,000 in 2002 to more than 6 million by 2006. Though that number may only account for about 10 percent of the entire home networking market in the end, InStat believes that it's a big enough lure for service providers to jump in with all of their resources.

But it's an uphill battle. As part of the research, InStat polled 500 Internet-connected households about provider-based home networking. A surprising 74.2 percent said that they would not be more likely to get a home network if their service provider offered one for a fee.

InStat also predicted when these types of service provider programs would really take off, calling 2003 a springboard year for provider-based home networking programs. By then, InStat said, lower cost CPEs with high power embedded processing engines will be readily available to consumers, and standardized service mechanisms-like those currently under development by the cable crowd under the CableHome banner-will provide operators a basic framework from which to operate.

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