I know what you’re thinking after reading the headline. “Here’s one more article about plain old telephone service (POTS) going away. For crying out loud, tell me something I don’t know!” Indeed, POTS is going away, whether by sunset or by sheer consumer demand. The problem is too many companies are slow to respond.

I recently heard that an estimated 70,000 POTS lines are being cancelled every week. The alarm industry is in a paradigm shift, and we are at a crucial juncture where creative solutions are desperately needed.

The market is ripe for technology companies that could care less about POTS. I suspect we will see many new entrants into the electronic security space from other IP-based industries. If you are a traditional alarm dealer that still connects POTS lines to control panel dialers, this is not good news for you.

A CALL TO ACTION

Interactive platforms that deliver information such as alarm data, video, home automation and energy management are the wave of the future. These interactive platforms create additional monthly revenue for alarm dealers as well as offer much more value to the customer.

As an example, alarm dealers have for years sold customers on the precept that the property insurance discount will provide a significant offset to the monthly monitoring expense. Today, the more advanced companies are selling the concept that the energy savings will provide an even bigger offset to the monthly monitoring and “hosting” expense.

As the conventional digital dialer continues to gradually disappear – hastened by lifestyle changes and consumer expectations for connectivity – alarm signal transmission is increasingly becoming a wireless process.

Therefore, the traditional alarm dealer should be actively seeking new IP-based solutions; there are many companies in the marketplace that offer these types of services.

Here again, you must change your mindset. I encourage you to conduct your business with the assumption, “POTS is going away within a year.” If that were the case, you wouldn’t hook up any new systems to POTS lines because in less than one year you would have to convert them. Well, then stop doing it now! POTS is going away.

I also constantly hear the argument that POTS is way more reliable than IP. True enough, but if POTS is going away what difference does it make? It’s like being on a sinking ship and adamantly declaring its shattered hull is made of the finest steel. For the alarm company operators with their heads buried in the sand, I predict they will see attrition numbers they never imagined possible. I don’t say this in a condemning manner, but rather as a call to action.

ENDEAVOR TO BE ON THE FOREFRONT

So let’s do some easy math. Assuming 70,000 POTS lines are going away each week and assuming that alarm monitoring has penetrated 30 percent of U.S. households and businesses, one could conclude approximately 21,000 POTS alarm accounts per week are being converted to some other technology.

In many cases the customer is unaware their alarm system has ceased to properly communicate to the central station. This creates massive liability. Alarm dealers need to carefully monitor “late to test” (assuming a test signal is programmed) reports to determine if a customer may have a communication issue.

If you’re an old school alarm dealer, then its time the old dog learned some new tricks! Alarm dealers need to begin offering new solutions to existing customers. Remember, there is no guarantee that even GSM will be supported by cellular carriers down the road. For traditional alarm dealers, this information may be a bitter pill to swallow.

If you take away no other point in this article, understand this: traditional alarm dealers must change their mindset in order to stay competitive.

Mark Matlock is Senior Vice President at United Central Control Inc., a wholesale monitoring station based in San Antonio.

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