Home monitoringTelecom and cable providers’ push into the home security market is yielding some major gains, according to a report from Imperial Capital. The report authors cited research from Barnes Associates showing that telcos and cablecos now have about 1.2 million U.S. accounts, up from 400,000 to 500,000 a year ago – an increase of more than 100% in just one year.

“Most of those gains have come from existing cable/telco customers, and, we believe, in competition from small POTS line-based local security companies,” wrote the authors in the Imperial Capital Security Industry Monitor April 2015 report.

Traditionally alarm systems communicated with a central monitoring station by phone line, but systems sold by cablecos and telcos use either wireless or broadband connectivity, sometimes both. Some but not all traditional alarm companies also have moved to the more modern technology.

Advertisement

Telecom, Cable Home Security
Cablecos’ and telcos’ strong growth has occurred despite some marketing and customer service issues, the Imperial Capital researchers said. The researchers believe those issues will be addressed, and when they are, the companies will be poised to create a “serious dislocation” in the market – largely at the expense of the industry’s numerous small alarm companies that have recurring revenues of $1 million or less annually.

According to Barnes Associates, telcos and cablecos now have a combined market share of about 4% in home security. The Imperial Capital researchers provided a “low case” forecast calling for telcos and cablecos to have 16-17 million homes by 2020 and a “high case” forecast calling for them to have 23-25 million homes by that date. Even the “low case” forecast outpaces what Imperial Capital anticipates for other players in the market, including the top 30 residential alarm monitoring companies and the smaller companies.

The Smart Home Driver
Growth in smart home systems will help drive increased sales of security systems, according to a separate research report from ABI Research.

“The smart home can increase the appeal of core professionally monitored services,” said Jonathan Collins, ABI principal analyst, on a recent webinar titled “Home Security in a Smart Home World,” in which he presented highlights from the research.

Traditionally, monitored alarm systems have been purchased by suburban homeowners, but Collins sees the addressable market becoming broader as do-it-yourself systems become more widely available. Nevertheless, Collins noted that 22% of the market would only look at a professionally installed system.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!