Why You Shouldn't Worry About AT&T's Entrance Into the Security Market

By Ken Kirschenbaum | January 22, 2013 | Comments (6) | Post a comment

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There is a lot of hoopla about AT&T entering the security market. It’s not just rumor; it’s here. We can expect many ads advertising AT&T’s all-digital, wireless-based home security and automation system. According to all the hype, AT&T is going to sell, install, service and monitor. How is competition from this giant likely to affect your security business?

Well, for starters, how does ADT competition affect your business? Although there are certainly a bunch of private (or public) companies out there that compete against ADT in certain marketplaces, most alarm companies are usually selling to a different customer. Most alarm companies are not able to mass-market free installation of systems and bank on the recurring monthly revenue (RMR).

I am not sure how AT&T plans to price its services, but I am going to take a chance and suggest that it will probably go head to head with ADT. The AT&T promotional information thus far promises a wide variety of services. Its branded service, “Digital Life” will include cameras, window/door sensors, smoke and carbon monoxide detectors, motion and glass break sensors, door locks, thermostats, moisture detection and appliance power controls. Devices will connect via the Internet.

My perspective in the industry is different from yours. I’m not in the alarm business. I’m a customer, a subscriber. I happen to have an alarm system, but 80 to 85% of fellow citizens don’t. That’s your market.

Your advertising budget doesn’t come close to ADT’s, and it’s not going to come close to AT&T. Let the two of them knock themselves out getting the public all worked up about all the new alarm security services. While many potential customers are going to respond to these ads, more than enough will be willing to shop the services. You know the principal advantages of your business and you provide personalized services. It doesn’t take half an hour or more to get through to your service department, and you don’t tell your customers that your service tech is going to be there any time from Monday 9 a.m. to Friday 5 p.m.

[ASIDE: Do I sound pissed? Last month I had two appointments scheduled with Verizon, an 8 a.m. to 5 p.m. schedule, or something like that. For two days, they never showed up. They didn’t even call. That’s for phone and Internet, which I already have. Do you think I — or any other consumer — will accept that kind of responsive service when security services are involved? I don’t. END OF ASIDE.]

So, my prediction is that AT&T’s entrance to this market — and we can expect more giants to get involved — is going to heighten awareness and open more opportunities for you to market your services.

Read more about: ADT, AT&T, Telecom Companies, Verizon

Review / Comment

I think on this topic lawyers should stick to legal matters. He missed the target here. By a long shot. Unless dealers step it up to partner with telecoms and others to offer more of these interactive mobile services they will have much to fear. Mr. Kirschenbaum has stepped out of his field of expertice here.

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Drew Silver
January 22, 2013

Hey Drew - did you say partner with telecoms? So you intend to do their installs and kiss RMR goodbye? Great plan. The telecoms don't really need you. My only point of contention with Ken's article is that you WILL lose clients to the AT&T's much in the same manner as you lose clients to ADT. However this industry is still a referral based one and service speaks louder than words. Sell based on your strengths. Thanks Ken.

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Neil WIlliams
January 25, 2013

My business partner and I disagree on this subject and his words tend to coincide with yours. While I am a little more fearful of the impact that AT&T will have on the market considering the complete range of products they can sell and use to obtain a single customer and thus locking us out of the alarm sector. We do currently offer all the advanced technology and wireless camera/alarm interfaces that AT&T will be offering and probablly without much price differenced since the cost to us to offer these services is on the the higher end. However, my partners opinion is that AT&T isn't a great company that a lot of people don't really want to trust with their alarms. They have tried to be an alarm company in the past and failed. He might be right, but in the end I wish the Teleco's would step out of the industry. They are chasings a dollar that doesn't really belong to them and they are going to tick a lot of customers off in long wrong creating customer dissatisfaction for the security industry. - shana at www.cfasecurity.com

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Shana Cooper
January 25, 2013

We don't do their installs Neil. We partnered with them and others to resell dozens of interactive services. Our rmr is growing fast and furious and none of our local competitors are able to offer the bundles we can. The door is closing for mid sized dealers to get in on the action because as you say, soon they will not need you. I think the alarm industry is looking in the wrong direction. We're a 1st level AT&T managed services partner/reseller just like P1. What are you selling?

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Drew Silver
January 25, 2013

Who ever owns the air wins this game.

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Mark
January 25, 2013

I love seeing how the telecom company can create more and more takeovers for us!!@ Drew he seems to sell out his future rmr for today cash, no true concern for the clients well being...just $$$$, resell Drew till they dont need you anymore, slaves to the big corps...hmmmm.makes sense???

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Adt man
January 31, 2013

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