The annual growth rate for the North American wholesale remote monitoring market is forecast to drop below 1 percent by 2011, according to a report by IMS Research. The total remote monitoring market is also expected to grow yearly by more than 7 percent, resulting in a 3-percent drop in share for the wholesale monitoring market by 2012.
According to the report author and IMS Research analyst Niall Jenkins, there are two main drivers influencing the slower growth in wholesale monitoring revenues. The first is the reduction of independent alarm dealers. Many owners are retiring or selling to larger players in the market, which is affecting the potential market for wholesale monitoring companies as the larger organizations usually monitor their own accounts.
Second, according to Jenkins, the potential to increase recurring month revenue (RMR) per account is limited in the wholesale monitoring business model. Alarm dealers are benefiting most when customers use additional services.
“Although consolidation has been quicker in the North America market, it is also evident in Europe,” says Jenkins. “The fragmented nature of the monitoring market in Europe has slowed consolidation to date, however as legislation and regulation become increasingly standardized, the industry will become more conducive to acquisitions.”
With the trend to consolidation impacting the traditional monitoring markets, many wholesale monitoring companies in North America are moving into the PERS (personal emergency response service) market. PERS involves responding to panic requests from the elderly or chronically ill, and provides wholesale monitoring companies with an opportunity to charge 40-percent more than when monitoring intruder alarms.
The aging population is likely to drive future market growth, making the PERS market extremely attractive to wholesale monitoring companies. IMS Research forecast that the North American market for PERS will grow at a compound annual growth rate (CAGR) of 11.6 percent to 2012.
