A case in point is Israeli mobile operator Partner Communications, which is leveraging the home gateway model to extend the reach of its 2.5G, 3G and 3.5G mobile services to home-based fixed devices. Partner, a subsidiary of Hutchison Telecommunications International Limited Partner serving some 2.9 million subscribers in Israel, is using NDS subsidiary Jungo’s OpenRG residential gateway software to support its new SmartBox residential gateway, which it hopes to place in 200,000 to 300,000 households over the next several years.
With SmartBox, launched in December 2008, Partner Communications has begun to provide its customers with broadband services, including 802.11n wireless networking, home media sharing capabilities and advanced VoIP capabilities, including integrated Digital Enhanced Cordless Telecommunications (DECT, an ETSI standard for digital portable phones) and call hijacking between cellular and fixed line.
The software-based OpenRG solution has been deployed in more than 18 million households worldwide, about 45 percent in North America through services such as Verizon’s FiOS, about 50 percent in Europe and the remainder in other regions. OpenRG supports MoCA, Wi-Fi and other popular home networks, as well as multiple fixed and mobile access networks. The hardware-agnostic, software runs on what Jungo describes as “most” residential gateway hardware and incorporates value-added features, such as QoS, VoIP, firewall and remote management, and a growing set of value-added services.
“The ability to offer new innovative services to our customers is central to Partner Communications’ strategy,” says Alon Berman, vice president, Internet and Broadband, for Partner Communications. “The residential gateway is now at the heart of the digital home, and key enabler of the advanced services that our customers want.”
Berman says the SmartBox strategy with the Jungo software will allow Partner “to offer our subscribers new levels of seamlessly integrated access and interaction with a wide range of entertainment and communication services.” The integration represents the first publicized fruits of Jungo’s year-old modification of its business model to expand beyond selling to hardware makers only.
“We changed strategy to engage directly with operators as well,” says Jungo CEO Eran Rom. “When Jungo just started to develop the product, we had a vision of triple- or quad-play gateways, but when the product was ready, the market wasn’t. So we sold to Dell and NetGear and others more focused on the retail market.”
Since then, the market has shifted again in a direction closer to Jungo’s original vision. “After two to three years, some innovative operators started to look for more innovative gateways,” Rom says. “At this point we focused our energies on this market. At the beginning we focused on OEMs to get to the operators. Now we are using bi-directional engagement, selling to OEMs when appropriate and to operators when appropriate.”
Through projects like Partner Communications’ Smartbox, operators are seeking to deploy one, multi-service gateway that can communicate with all the other devices in digital home networks, ranging from TVs and set-top boxes to computers to PDAs, iPhones and game consoles.
Beyond merely unifying access to multiple services – thereby reducing the number, kinds and incompatibilities of single-service access boxes – the residential gateway has begun to provide operators with remote management capabilities and, Jungo says, an increasing stable of content and applications features.
On the remote management side, operators stand to reduce both capital and operational expenses. “Operators are trying to cut costs in regards to set-top box price, and we have several ideas,” Jungo’s Rom says. “One idea is to move conditional access from the set-top to the gateway, terminating the security and access parts to the residential gateway, and using IP and security methodologies to move content to the set-top or TV with a much cheaper IP set-top box. The RG will gain more responsibility, more control, more content and will even play a more important role in the digital home network environment.”
At the basic services level, OpenRG offers enablers for qualify of service and performance boosters and accelerators for VoIP and IPTV.
However, according to Rom, operators are looking for other value added services, such as providing customers with remote access to their file systems, with the ability to share media content with friends and others, and with largely new capabilities such as being able to use an IP camera to watch one’s home from a remote location.
“There are many, many applications” being talked about, he says. “They are desperately looking for real value-added services that will create real business – features that people will really buy.”
In a tough economy, savings on capital and operational expenses could prove to be the leading drivers of residential gateway market growth, says Rom. Jungo believes it can reduce operators’ capital spending by empowering them to run a single software solution across multiple, competitively bidding hardware suppliers and by reducing access CPE costs beyond costs of set-tops by taking on more set-top functionality.
On the operational expenses front, Jungo provides “middleware in the gateway that is in the center of the home network, so it can identify and see many problems in configuration or any misuses, then either fix it or give the end user easy instructions to eliminate calls to the support center,” he says. “The average user is calling three to five times a year. At $10 to $15 dollars per call, that is $40 to $60 a year per user a year. If you could be able to eliminate two or three calls per year, we just reduced by half the operational expenses related to support.”
If savings comprise the initial driver, he argues, the search for monetizable applications and content will follow closely behind. “The second type of drivers will be increasing the revenue that they can generate from such a gateway,” he says. “The challenge is to come up with the right value-add services with the right business cases to justify prices. The gateway is one of the players that will make that happen. We think we provide a stable environment, but we think each operator knows the end user better than anyone. We think we can work with them to engage developers to create applications for each market.”
For all these virtues of centrality, reduction of redundant hardware and software and remote management capability, the movement of functions beyond access and security from home network end points into the gateway – such as OpenRG’s ability to centrally index and navigate content across multiple home network devices – throws another vector into the applications platform mix. However, Rom argues that gateway middleware is “complementary” to industry efforts on the app platform front, such as CableLabs’ tru2way, Microsoft’s Mediaroom or Nokia’s Symbian, which generally have not advanced gateway solutions.
Still, as a subsidiary of digital pay television technology supplier NDS Group plc, Jungo may be well positioned to integrate the gateway more deeply into the applications middleware fray. Late last year, for example, U.S. cable operator Cox Communications selected NDS to implement a next-generation Cox TV user interface that will integrate search and other interactive functions across linear channels, VOD, DVR and Internet video content with features and look and feel eventually to be carried across TV, PC, mobile and other Cox subscriber viewing screens (see ScreenPlays, January 2009, page 18). While Cox has not announced a residential gateway roadmap, the integration of both access and user interface arguably makes a gateway implicit.
In some senses, the more centralized feature-rich gateway software model stands in contrast to more distributed models like the Digital Living Network Alliance (DLNA), which focuses on discovery and playback of content across plug-and-play devices in a home network. While the DLNA model empowers retail consumer electronics and service provider CPE alike to the home network control scenario, the gateway model offers perhaps more opportunities for control to the service provider.
Additionally, Rom suggests that many in the industry may have underestimated the difficulty of implementing DLNA. “It’s slower than everybody anticipated,” he says. “An example of something everyone is trying to make work is the home camera. AT&T is offering a package of camera, sensors and a box to manage all of this. It sounds like it is very easy to buy the camera, plug it in and have it controlled via WiFi. The truth is that you have to register and employ ID systems, and it faces configuration issues. Getting it to work is a nightmare. Techies have trouble. My mother could never cope with it. We think of how easy it will be for the end user to register and use these applications. Otherwise it will never have uptake.”