Is the IP camera resale model profitable for Telecom Operators and how to switch into an “as-a-Service” approach?

Telecom operators and ISPs often mark their presence in the physical security market by solely offering cameras, doorbells, smart locks, camera kits, CCTV devices, and other home security-related products in their retail stores, eShops, etc – IP camera resale model. These devices are part of consumer device programs primarily supporting operators’ goals to increase traffic consumption.

In this case, the operator’s role ends at the point of device sale. The ongoing customer loyalty, retention and payments (cloud archive, camera amounts tariff, app, upsell functional, device crossselling) remains with the third-party vendors.

Aipix shifts this model by enabling telecom operators to generate recurring revenue around this ecosystem of devices – from one-time hardware sales to ongoing, operator-led video surveillance services.

The issue of IP camera resale model unveiled: the revenue and value hidden

Here’s an exemplary breakdown based on one of the Aipix client’s unique use cases (it is an approximate example as all cases are unique and private): a revenue leakage that shows all recurring revenues that migrate to the camera vendor (f.e. Xiaomi outdoor camera) and other strategic losses when the operator sells the only-hardware part of the video surveillance service.

Revenue leakage if keeping device sale model

Base logic of Xiaomi outdoor camera consumption in operators store

• Total subscribers: 795.184
• CCTV penetration in households: 3,8% = 30.217 subscribers buying CCTV devices 
• Device number presented by operator: 11
• Number of this particular camera bought: 2.747

Basic logic of telecom revenue from Xiaomi outdoor camera sales

• Camera price in standard telecom shop: $68
• Operator margin on hardware: 20% = $13,6 per one camera
• Revenue from this camera sales: $37.359,2

Basic logic of Xiaomi post-sale camera economics

• 7 days cloud archive in the Xiaomi app: ~$3/month per camera 
• Cameras+archive Xiaomi revenue in 3 years: $419.112,8

The result:

• Hardware is small (~11% of total value)
• Cloud/subscription is ~89% of lifetime value

Strategic telecom operator losses of IP camera resale model 

The real loss is not only the revenue. When customers are served by Xiaomi after sale:

1. Xiaomi owns the customer relationship through the app.
2. Xiaomi controls subscription billing.
3. Xiaomi sells additional cameras and smart-home devices.
4. Xiaomi captures cloud-storage revenue.
5. Xiaomi can introduce AI features and premium services later.

What to offer and what to get by going from device sales to operator-owned services based on video surveillance?

For operators, the customer demand is now proven and easily predicted. Sale, promotion and device distribution channels are performing well. 

The next step is to transform from selling more cameras and smart security devices to building recurring revenue from your own cloud video surveillance service. Reaching B2C, B2B and even B2G with comprehensive offerings, providing and keeping:

• The applications for customers under the operator’s brand.
• Own local cloud archive service corresponding national sovereignty
• Flexible subscription-based bundles (internet +camera).
• AI-analytics capabilities.
• Customer lifecycle management.
• Upsell and cross sell upgrades.

When operators introduce service layer fully controlled by them, they have much more business benefits:

• Switch from one-time device sale to cloud video surveillance service generating recurring revenue.
• Growing broadband and fiber penetration with additional value of connectivity+security service bundles  
• Branded security service to remain visibility and customer engagement 
• Owning customer relationships and experience through the service lifecycle 
• Upselling broader archive and analytics services as premium add-ons
• Securing future pass to upgrade from only consumer cameras to B2B security services based on video surveillance

How Can Operators Apply “as-a-Service” Model? 

The transition from camera resale to security services based in video surveillance doesn’t require big investments and changes on core business. Telecom operators and ISPs have already prepared the key ingredients: sales channel, customer demand, device portfolio and infrastructure. The one thing they need is ready-made Aipix VSaaS Platform as the software layer. This layer will enable to launch, manage and monetize services based on video surveillance simply due to: 

• Aipix is a ready-made platform designed for rapid deployment and scalable service delivery
• Connection of already installed IP cameras and effortless integration of devices from different vendors into a unified solution.
• Seamless full deployment into telecom environments through open APIs, connecting with billing, inventories, etc. 
• White-label model to brand mobile applications, web- and desktop interfaces under their own corporate style, keeping the customer relationship firmly under operator control.

The result is a low-risk upgrade from “only-selling” to “as-a-service” business model: maintain existing camera sales, strengthen customer ownership and lifetime value, add recurring revenue layer, and create a scalable upgrade path from residential users to B2B video surveillance-based services.

To lower the risks we offer a free pilot project, allowing operators to test the solution in real-life conditions, and measure tangible business results before scaling.

Every camera sold creates an opportunity for recurring revenue. Make sure that opportunity belongs to your business.

Contact our team to discuss your business case. We will assess your current device ecosystem, identify monetization opportunities, and build a roadmap from pilot project to full-scale service launch.