October 11, 2012
AT&T Digital Life Raises More Questions about Phone Companies Trying to Sell Home Security
With several of the cable and telecom “big boys” having entered (or in some cases re-entered) the highly competitive world of home security, we weren’t surprised to see telecom giant AT&T announce they were getting back in the game. I say “back in the game” because over twenty years ago AT&T engaged in the business of protecting homes and families; the technology was quite expensive and not very good, and AT&T exited the alarm space some time ago. But now they are back, following in the footsteps of Comcast, Cox, Time Warner, and Verizon. The alarm industry is watching these new entrants closely, as this article from an industry publication demonstrates.
AT&T isn’t just entering the security space with trials here and in Atlanta this summer of its home security/home automation service. The telecom also believes it will be able to transform that space through such innovations as letting customers try out its new Digital Life product in its more than 2,000 retail stores around the country, an AT&T executive told Security Systems News. In addition, AT&T is “seriously exploring” adding door-knocking to its range of selling techniques, said Kevin Petersen, senior vice president, Digital Life, AT&T Mobility.
Wait a minute! Did I just read “door-knocking” in reference to AT&T alarm sales? Ouch! For millions of US homeowners, the specter of even more alarm salespeople canvassing neighborhoods to troll for alarm customers is not a pleasant thought. After all, it’s exactly these door knockers who have been giving the alarm industry such a bad name, with lawsuits, fines, and other penalties widely reported across the country. We know a lot about the way alarm company door knockers work, and this prior post lays out all their tricks. Or, if you want to see what Better Business Bureau (BBB) offices from around the US have to say, check out this article.
Alarm Industry Expert Dials in on AT&T
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. "My conclusion to you is that the amount of dollars spent on marketing this area, on the part of everybody, is going to increase… the effective market and that we could get to 35 or 40 percent penetration of American homes using these services in the next five to eight years, which is again almost double what it is now. That is enough to provide AT&T with a lot of success, even though they may not be taking customers away from ADT. The rising tide will help all ships here."
In other words, AT&T may be poised to leap-frog many of the traditional “old school” 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 of 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 this select group) 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.
So, unlike the non-monitored Verizon offering, AT&T’s Digital Life will be an actual alarm system that is monitored 24/7 in addition to providing interactive services: that’s a good thing. Installation is to be handled by non-AT&T employees, and no wonder: in most states, alarm installation techs are subject to licensing requirements that can be quite stringent, with background checks, specialized training, and even technical examinations on alarm technology. It’s not surprising that AT&T is in no hurry to take the technical work on themselves – it’s a hassle, but states have implemented these barriers in the interest of consumer safety.
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.
The entry of AT&T into the highly competitive interactive home services market 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 another new entrant to our industry, since these companies have deep pockets, and are spending heavily to reinforce the benefits of what FrontPoint has 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 – and call us.