AT&T today said it will launch its wireless-centric home security and control offering to eight markets beginning in March. The carrier also revealed that Cisco Systems will supply the control panels that will be installed in customers’ homes. Cisco’s involvement is a bit of a surprise because the company traditionally has played in the physical security market only for high end enterprise systems.
AT&T has been testing the offering, dubbed Digital Life, in Atlanta and Dallas. A company spokeswoman declined to provide any additional information about the eight markets, including whether they included or were in addition to Atlanta and Dallas.
Today’s announcement comes at a time when many industry observers see significant opportunities for communications service providers in the home security and control market. Increased use of smartphones has enabled security equipment manufacturers to give customers the ability to control and check in on their systems remotely – a capability that is attractive to many end users.
Among other things, AT&T Digital Life can enable end users to watch live video from cameras located at their home, remotely lock and unlock doors, and control thermostats. The AT&T spokeswoman declined to provide pricing on the offering.
AT&T has previously revealed that end users will be able to use any wireless service to check in on an AT&T Digital Life system, but communications with the central monitoring station will be via an AT&T 3G connection. AT&T also has said that it has established its own central monitoring station – a move that cable companies and AT&T rival Verizon have not yet made.
Cable companies such as Time Warner and Comcast that offer home security and control rely on third-party central stations to provide monitoring, and Verizon’s only direct offering in the home control market does not include central station monitoring.
Another differentiator for AT&T is that its system relies primarily on wireless for communications with the central station, although customers also can use landline broadband for that purpose. The cable companies, in contrast, rely primarily on a landline broadband connection – and in so doing they are bucking the status quo in the mainstream home security industry, in which alarm dealers are more likely to use cellular for new installations.
AT&T also has gained considerable experience in the home security market indirectly because for several years it has been one of two national wireless operators, along with T-Mobile, to provide cellular connectivity for home alarm systems. Verizon Wireless, Sprint and other CDMA operators initially were closed out of that market because the components used in their handsets were more costly than those used for GSM/GPRS.
That scenario is beginning to change, however, now that AT&T has announced plans to phase out its GPRS network and T-Mobile has announced it will scale back on GPRS availability. Verizon recently garnered an important customer in Lowe’s, which offers a home security system that supports cellular connectivity through Verizon Wireless.
Some industry observers have speculated that AT&T, Verizon or one of the cable companies might purchase ADT, one of the nation’s largest home security companies – and that’s a move that could make a lot of sense for Verizon or one of the cable companies because in addition to jump-starting their entry into the market, it would give them their own central station. But I doubt AT&T would be interested in buying ADT. If it were, it wouldn’t have built its own central monitoring facilities.
It’s worth noting that AT&T’s Dallas and Houston test markets are both markets where AT&T is the incumbent local carrier. Potentially the company could offer Digital Life outside its local service footprint. But the company spokeswoman said the company plans to use AT&T technicians to install the home security systems. And that could make it more complicated to offer service outside its home turf. So I’m expecting the eight markets we’ll hear about in March to all be within AT&T’s local service territory.
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