With several of the cable and telecom “big boys” entering (or re-entering) the highly competitive world of home security, it was only a question of time before AT&T got back in the game. I say “back in the game” because over twenty years ago the AT&T brand was engaged in the business of protecting homes and families; however, like most of their colleagues in cable and telco, they exited the alarm space some time ago. But now they are back, following in the footsteps of Comcast, Cox, and Verizon. The alarm industry is watching these new entrants closely, as this article from an industry publication demonstrates.
Telecommunications giant AT&T earlier this week formally announced that it is entering the home security and automation market with its “Digital Life” services. In addition to offering traditional alarm system features -window and door sensors, smoke detection, and motion and glass break sensors – the Digital Life portfolio also includes the integration of modern home automation technology including thermostats, moisture detection and appliance power controls.
In other words, AT&T is poised to leap-frog many of the traditional alarm companies. After all, there are roughly 13,000 alarm service providers in the US: it’s a hugely fragmented industry, where most of the players are smaller companies that have been slow to adopt the latest technologies in interactive monitoring and integrated home automation. Even ADT, the dominant player, was slow to release Pulse, its own version of advanced home alarm and automation services. Very few alarm companies (FrontPoint among them) have specialized in these offerings, which include remote arm/disarm, free mobile apps, event notification by text and email, video services, and even remote control of lights, locks, and thermostats.
Straight from the Source
According to Kevin Petersen, senior vice president of Digital Life for AT&T mobility, AT&T also conducted research and found that many companies in the industry were relying upon old technology and that consumers were unsatisfied with the current set of features and functionality available in the marketplace. “People wanted to be able to use their system to do more than what they’re able to today. They also wanted choice, value and transparency and a solutions orientation that, at least from our research, they weren’t finding,” he said.
What Does AT&T’s Model Look Like?
AT&T has built two all-digital monitoring centers in Atlanta and Dallas where the company plans to begin trials of the service this summer. Petersen said that the company will have “dedicated partners” that are licensed install the systems and their associated components to ensure that they are installed right the first time.
So, unlike the Verizon offering, this will be a “real” alarm system that is monitored 24/7 in addition to providing interactive services: that’s a good thing. I’m a little less clear on the installation aspect. In most states, alarm installation techs are subject to licensing requirements that can be quite stringent: background checks, specialized training, and even technical examinations on alarm technology. It’s not surprising that AT&T is not in a hurry (yet) to take this on themselves – it’s a hassle, but states have implemented these barriers in the interest of consumer safety.
Alarm Industry Experts Speak Out
According to Jeff Kessler, long-time security industry analyst and managing director of Imperial Capital, LLC, many of the telcos initially attempted to make a foray into just the home security market about 10 years ago, but they didn’t generate a lot of earnings and most of them eventually sold off their security assets. Over the last two to three years, however, Kessler said that much has changed in the market, including a willingness by consumers to start adding things besides security to their home security systems including cellular backups, and video surveillance.
Kessler also believes that the competitive landscape has changed. “Up until now, one of the things that has held guys like AT&T back from really trying to market these services is the very negative branding or response that many existing users have to the carriers. When someone tells you that they’re going to show up at your home in a week, sometime between the hours of eight and five, that doesn’t cut it when you have either a security issue, which has to be dealt with immediately, or you have a healthcare issue, which not only has to be dealt with immediately but over a long telephone call,” Kessler explained.
Another Expert Weighs In
Jim Callahan, president of Atlanta-based Ackerman Security Systems, said that he’s seen a number of companies enter and exit the security industry during his 32 years in the business and that how AT&T will fair in the space remains to be seen. “In my opinion, at the end of the day, it’s going to come down to execution and that’s where these types of companies have failed. That’s been their Achilles’ heel,” Callahan said. “I mean let’s face it, the consumer’s general perception of phone companies or cable companies is pretty low. They’ve been the butt of jokes on Saturday Night Live now for probably 25 years.”
Alarm Companies Need to Stay Current
One of the things that Callahan said his company has been focused on is educating their customers and the markets they serve that they also offer the services being touted by AT&T and others. “I think the challenge will be for dealers who make the mistake of just sort of ignoring this,” he said. “If an end user who is interested in these types of things -video, locks, lighting or energy savings – understands that a security provider offers these things, at the very least I believe they would make a comparison between what is being offered by the cable company or phone company and at the end of the day, because of the uphill that these organizations have with a perception of their service, many people will select their alarm provider because they are accustomed to that more hands-on, close relationship.”
This article represents good news for alarm companies that combine world-class service and the advanced technologies of interactive monitoring and home automation – like FrontPoint! We welcome these new entrants to our industry, since they are spending heavily to reinforce the benefits of what we have already been selling and supporting for years – as a “real” alarm company that is focused on protecting homes and families. We fully expect that the more people research their options, the more they’ll choose FrontPoint. As the leader in wireless home security, we specialize in the best protection: that’s why we’re the #1 ranked alarm company in the US for systems that are safer, smarter, simpler, more affordable, and virtually impossible to defeat. Just check our reviews.