Technology innovation and investment will continue, but at a more measured pace
As background to 2023, the economic outlook will impact consumer spend and overall investments in new services and technologies. As many countries face a probable recession, service providers are closely considering the timing of their network infrastructure and Home Customer Premises Equipment (CPE) investment from 1Gbps services to the first 10Gbps capable networks – weighing the return considerations for customer growth and retention. On the upside, we expect the supply constraints the connectivity and consumer electronics industry has faced since mid-2020 to continue improving through 2023 and beyond.
We still expect service providers to continue in the investment of fiber infrastructure with a rise in the number of fiber and XGS-PON connects. This investment is viewed by service providers as critical for the growth of new subscribers and retention of subscribers through the next generation of consumers services in the next 5 years. While 2022 saw the rise of the 2.5GBE interface in gateways and for first time in many people’s homes, 2023 will see the rise in the first 10GBE interfaces on XGS-PON gateways. This is a marked step up in Ethernet capabilities that is probably ahead of the consumer’s ability to fully leverage but another step on the path to the “10Gig home.” The fiber technology area is not standing still at 10Gbps either with International Telecommunications Union (ITU) standards now complete and the next generation of CPE silicon in development for 2024/2025 early samples and trials.
DOCSIS® 4.0 will emerge first in labs, and then in field trials towards the second half of 2023. DOCSIS 4.0 is the next generation of the DOCSIS protocol allowing for speeds of 10Gbps providing an economical path to increasing the life of Hybrid Fiber-Coax (HFC) networks.
To get the 10Gbps speeds on cable plant, the spectrum currently occupied by QAM Video will need to be retired, especially if the plant is not upgraded to 1.8GHz ahead of the need for more IP capacity. Cable operators have been moving towards “All IP” video with the introduction of 4K UHD capable Wi-Fi® IP streamers/set-tops, and 2023 will see an acceleration of this trend ahead of DOCSIS 4.0 introduction.
Wi-Fi 7 is the third iteration in Wi-Fi and 2023 will see the industry start to normalize its next four years for Wi-Fi performance on this standard. It will be aligned perfectly with the 10Gbps capabilities of XGS-PON and DOCSIS 4.0 to get (for the first-time) matching speeds across the access and Wi-Fi home network – with new levels of determinism and quality of service.
This level of determinism of latency and speed across the access to the home Wi-Fi network is expected to be the platform that will allow a new generation of home services to emerge. The flagship of these presently has been immersive video solutions like Meta’s Metaverse offering where the applications will need the lower latency, speed and reliability now being offered by service providers to build ever more realistic virtual applications. These applications can extend to new breakthroughs in hospital-at-home technologies, as well as in-home office solutions as well.
The key for service providers: reliability and a cohesive application experience, at the right price
Service providers will continue to focus on customer retention and growth in 2023 as they face the highest level of competitive pressure that they’ve seen in 15 years. There will be renewed focus on value and performance ratio for the customer with cost becoming more dominant than speed. Competing on speed alone is a costly proposition for a service provider and consumers are increasingly more aware of their decreasing needs for faster speed, so new ways to attract customers will emerge, including a focus on reliability and a compelling home application experience. Driving “sticky” applications and good customer experience will be an important factor in customer retention in 2023.
Reliable and optimum connectivity in the home is now essential. Hybrid working has normalized traffic patterns to 9am-5pm work-from-home connectivity and the usual 5pm-9pm entertainment peak. As consumers spend more time in the home for work, education and entertainment, the tolerance for unreliable broadband continues to lower. Wired broadband providers will look to provide failover solutions and will need to find a model that works for them and the consumer. Service providers should lean-in to Wi-Fi reliability and performance commitments, with better mesh solutions and increased software control of services delivered over Wi-Fi.
Latency is becoming more important than raw topline speed claims and directly impacts consumers’ perception of service providers – especially in households that include gamers, who will always look for the best solutions to be competitive and win. With Wi-Fi 6 scheduling and new quality of service protocols, gaming services can indeed be realized to very defined wireless speed, latency, and jitter performance levels. We expect to see gaming become one of the prominent services to use 6GHz Wi-Fi spectrum in 2023 and beyond.
The latest Metaverse experience exemplifies the need for tight controls on speed, latency, and jitter, and will be paramount for a user-accepted immersive experience. As we move toward more immersive experience services in the home with AR/VR/MR, it will become critical to implement a new level of latency control to maintain proper immersion quality.
Additionally, service-aware connectivity and intelligent service management will become more important in Wi-Fi solutions to not only understand the device type, but also understand the application that’s running to ensure the right quality of service priorities are applied for maximum consumer satisfaction. Enhanced consumer performance metrics and the ability to silently resolve issues (sometimes before the consumer even notices the issue) will be key to the performance and reliability of services offered to the consumer.
The power of Wi-Fi 7
Consumers will begin to see increased retail marketing on Wi-Fi 7 and there’s a high probability that every new device design retailed at $100 or more will move to Wi-Fi 7 capability sometime in 2023. A multitude of marketing campaigns around Wi-Fi 7 will determine how quickly consumers value the additional performance, but technology and solutions vendors like CommScope are already in the process of developing gateway, extender and connectivity Wi-Fi 7 solutions for service providers.
Retail vendors will lead the Wi-Fi 7 wave by enabling higher capacity, lower latency, and software deterministic Wi-Fi services; technology and solution vendors will follow with Wi-Fi 7 solutions for PON, DOCSIS and FWA access networks, as well as Ethernet-based Wi-Fi 7 access points for two-box service provider architectures and retail.
In many ways, Wi-Fi 6E was a fast-tracked version of Wi-Fi to ensure Wi-Fi solutions made first use of newly granted 6GHz spectrum, but it will be tri-band Wi-Fi 7 devices that will make full use of 6GHz, with Wi-Fi 7 allowing applications to leverage total control of the Wi-Fi frequency bands, using MLO (Multi-link Operation). As the main application for Wi-Fi 7 and the new 6GHz spectrum is currently Wi-Fi mesh backhaul, it’s anticipated that most service providers will move to offer a Wi-Fi 7 gateway and extender experience. Specific use of 6GHz bands will also emerge for lower latency and capacity driven services like immersive video applications – so don’t be surprised to see specific Wi-Fi SSID emerge for differentiated lower latency connections.
The U.S. and Canada are at the forefront of regulating the use of Standard Power (4W EIRP) in the 6GHz bands – changing the game for 6GHz Wi-Fi by catapulting it to the front of performance bands and effectively providing 2-5Gbps of Wi-Fi to corners of the largest homes. Several technology and solutions vendors are providing an Automatic Frequency Coordinator (AFC) solution to give access to these higher power channels, and North America is expected to be the first area to capitalize on these new “higher power” Wi-Fi bands for improved capacity and latency at range. We hope in 2023 for more countries to allow Standard Power in the 6GHz bands and not divide the world on access to higher power 6GHz Wi-Fi applications.
While much of the focus will be on the new Wi-Fi 7 solutions emerging, there is still a need to drive value-add solutions for existing Wi-Fi 6 solution portfolios. A cost-effective dual band access point will remain a key essential for most deployments in 2023.
One highly discussed question that will be answered in 2023 is whether a dual band access point device will emerge on Wi-Fi 7 to support better use of 2.4/5GHz spectrum with MLO capabilities or will most of the Wi-Fi 7 gateway and AP devices be tri-band or even quad band.
Back to the future with video bundles
Streaming video services will continue to be the primary source of entertainment, with streaming video making up 80% of all content consumed by a typical home in 2023 (with 10% devoted to gaming). Increasing bundling of streaming services will simplify the consumer purchasing and viewing experience as the number of services grows. Service providers will continue to focus on owning the live and streaming aggregation point on a single streamer/set-top device to make the user experience for content navigation as seamless as possible.
New software-based solutions are changing the home management paradigm: using the Gateway Edge with the Cloud
Beyond quad play (fixed voice, broadband, pay-television services and mobile service), service providers are exploring the next generation of immersive video solutions, and other areas like telemedicine, elderly care, and more.
One of the most important elements of the connected home over the next three years will be the focus on using software solutions to manage and drive services to the home. With the emergent new capabilities of containerized solutions in the broadband CPE open-source software (prplOS/OpenWRT and RDK-B), the ability to easily add and remove services to the gateway will increase the cadence in software service solutions to the home. Coupled with the ability to get detailed telemetry from the home devices with new standards, service providers can enhance their abilities to manage quality, manage energy, and simplify home digital experiences. With the increase in performance of the Broadband Gateway, much of the processing can be done locally – reducing latency and costs for cloud-based processing solutions.
As one of the key containerized additive services to the home, we see growing momentum in 2023 for Matter, the new smart home standard, to become the aggregating standard for all home IoT devices – enabling the preferred smart home applications consumers want to use.
Building a sustainable future
While attitudes towards sustainability vary across the globe, there will be growing consumer awareness and demand in 2023 for sustainable CPE products with lower power consumption, use of recycled plastics, elimination of single-use plastics, and more. Leading service providers have set environmental, social and governance goals and there will be increasing collaboration between technology vendors, solution providers and operators to deliver solutions that deliver on sustainable science-based targets.
It is yet to be determined how the events and economical influences of 2023 will impact the direction of the connected consumer home, but one thing is fairly certain: 2023 is primed to be a foundational year with the ability to truly transform the consumer home experience. Over the next year, we will see how service providers partner with technology and solutions vendors to attract and retain customers, how Wi-Fi 7 will be marketed and influence buying patterns, how (and how much) service provider innovation and investment plans will be altered, and what the next generation of home networking holds. As we wave goodbye to 2022, it will be best remembered as the year of hybrid work and the realism that building the next level of human digital experience is a marathon – not a sprint.