AT&T’s Digital Life interface will allow homeowners to wirelessly and remotely control an array of security and automation devices.
ATLANTA — AT&T is the latest telecommunications company to launch a portfolio of IP-based home security and automation services, further ratcheting up competition in what is projected to be a multibillion-dollar market within a few years.
AT&T will begin trials for its “Digital Life” services in Atlanta and Dallas later this summer along with opening an all-digital monitoring center in each city. The offering features a suite of Z-Wave-enabled devices that will be integrated through a software platform by Xanboo, which AT&T acquired in 2010.
A highly fragmented marketplace and consumers’ increasing adoption of mobile devices helped convince the telecom giant the time was ripe to introduce its new services, Kevin Petersen, senior vice president, Digital Life, AT&T Mobility, tells SSI.
“Given the many players that are largely utilizing old technology, we think there is a real opportunity for someone to come in with a full suite of value-oriented offerings that bring features, functionality and a level of interactivity that isn’t there today,” he says.
The Digital Life “ecosystem” will include professionally installed and monitored window and door sensors, CCTV cameras, smoke alarms, carbon monoxide (CO) detectors, motion and glass-break sensors, thermostats, water shut-off valves, door locks, plus the ability to remotely turn off appliances.
Digital Life will eventually be marketed nationally at AT&T’s 2,000+ retail stores where consumers will be able to test and experience the system’s user interface as well as the various service offerings. The services will also be available for purchase on the company’s Web site. Although Petersen would not provide specific details, he says AT&T has partnered with a number of contractors that are licensed to install security systems and automation devices.
“We have a set of dedicated partners that will be nationwide and integrated into our dispatch and scheduling system. It will allow us to handle everything in the background for the customer so all they need to know is it will be installed correctly, it will work and they will understand the system by the time we are finished,” he says.
AT&T, along with other telecom providers such Comcast, Time Warner and Verizon, are entering the home security/automation market at a time when it is soon projected to explode, says Tom Kerber, director of research for Dallas-based Parks Associates. Currently, roughly 20% of U. S. homes are said to have security systems, while 1% use some form of automation.
“This will be a multibillion-dollar space in five years’ time,” he says. “From a market-share perspective, I don’t know that [the telecoms] are in any better position than all the existing security firms that are already there. They just have potentially a larger customer base.”
Dealers Can Prosper
While AT&T’s retail store footprint will provide the opportunity to have face time with a wide swath of consumers, installing security contractors remain well positioned to compete for early adopters, Kerber says. “To sit across the kitchen table from a consumer and explain all the values that are possible with the system will be an advantage for the security dealer channel until this gets to more broader-scale adoption.”
Despite the expected fierce competition, national marketing campaigns by the telecoms are sure to benefit security dealers, says John Loud, president of Atlanta-based Loud Security, who also serves as president of the Georgia Electronic Life Safety & Systems Association (GELSSA). “At a recent GELSSA meeting, I challenged other dealers. I said, ‘Guys, your phones are going to ring and you can thank [the telecoms]. But what are you doing to be prepared? Are you ready to offer these services?”
To better position his own firm, Loud just launched a new mail marketing campaign to promote interactive services to all those who have been customers for three years or more. Plus, this year the company ran its first television commercial.
Loud fully expects AT&T to be a viable player in the home security market, despite retreating from the space previously. “They have a very different formula and much better preparation this time. Don’t trick yourself to believe they are going to come out and fumble,” he says. “It’s not something that scares me, it just makes me be very aware.”
Russ Ackerman, district sales director for Jacksonville, Fla.-based Certified Security, a Vector Security company, also believes the large-scale marketing efforts by the telecoms can do nothing but benefit security dealers.
“The cable companies in several Florida markets have already driven consumer awareness. This is making it much easier for us to introduce lifestyle enhancement products such as remote services, video and Z-Wave technology,” he says.
Ackerman explains security dealers need to contact their existing customers and get the word out that they too can provide interactive services at a competitive price. Customer care will also be key to holding onto early adopters.
“We need to step back and look at things like, how do we answer the telephone and E-mails? How do we handle customer service issues? How friendly are our install and service technicians? All sales consultants must be well trained and better prepared than the utility company reps,” he says.