AT&T Chairman and CEO Randall Stephenson and Deutsche Telekom Chairman and CEO Rene Obermann meet after announcing AT&T's $39 billion acquisition of T-Mobile USA from its German parent.
Photo credit: Photo courtesy AT&T
March 22, 2011 -- On Monday, AT&T announced it had reached an agreement to purchase T-Mobile from Deutsch Telekom for about $39 billion. The move would create the largest cellular company in the United States.
The merger could prove to be significant for the security industry, say security industry experts whose own businesses interact with the world of cellular communications. The reason is that the security industry is moving more and more towards cellular communication paths as either the back-up or as the primary method of communication for alarm systems (and sometimes even for video surveillance).
According to Gordon Hope, general manager of Honeywell's AlarmNet, both companies are using GSM technologies. GSM is a 2G mobile telephone technology standard adopted by a number of cellular companies, and it has also been the standard technology for cellular communicators used to connect alarm systems back to phone networks and thus to monitoring stations.
Shawn Welsh of Telular, another company which makes GSM cellular communicators for security and fire alarm systems, said that both companies share their current 2G technology, and both are deploying HSPA+, a 3G technology that some providers brand as 4G. AT&T, said Welsh, is also deploying its LTE 4G technology.
"This is good news for the [security] industry," said Welsh, who serves as Telular's vice president of marketing and business development. "Dealers and customers should see improved signal strengths and coverage."
Mark Hillenburg, who heads marketing for alarm systems company Digital Monitoring Products (DMP), which also produces cellular communicators for its panels, said that the announcement of the proposed acquisition likely won't see any direct effects on the security industry in the near future. He said that anti-trust laws will likely slow the deal down for a year. And even if the acquisition deal were to fall through or be blocked by regulatory agencies, the deal would still set up roaming agreements between T-Mobile and AT&T -- two firms which he said had typically not had roaming agreements in place before.
The other benefit of the acquisition, he said, would be a more robust network.
"The AT&T network is bogged down and has a lot of traffic. The T-Mobile network is a very nice network, and it tends to have better coverage in metro areas and interstate corridors. The [combined] network is just going to get better," he said. That means better coverage for your alarm customers who are considering using cellular communicators as back-up communicators, or who are considering dropping their POTS line and going to cellular as their primary alarm system communication method.
Welsh said certain areas, including the Carolinas, could see a direct network benefit.
"All users of GSM equipment should benefit from a greater cellular footprint. This is truer for T-Mobile customers, but in our experience, AT&T users will see a noticeable increase as well in some pockets of the U.S., for instance, the Carolinas."
If anything, it should mean that there's even more of a guarantee that your alarm triggered signals will reach the central station, but Hillenburg said it really hasn't been a problem for such low volume users of cellular data networks like the alarm industry.
"When our alarm panel tries to send a message over the GSM network, it sends 15 or 20 bytes of data. That is just tiny and the data gets through even if the network is busy," he said. "To use an analogy, if you've ever been stuck in traffic on a freeway in your car, it's like watching the motorcycles zoom on down the road among the cars."
Welsh added that when the deal goes through, he does not anticipate the merger would significantly change pricing. "AT&T is already the provider behind the vast majority of the security market; as such, there shouldn't be any pricing change."
Hillenburg concurred, noting that the amount of data used by machine-to-machine (M2M) communications -- like an alarm panel's connection to the central station –- is so small that it would be surprising to see price changes in this area.
Consumer speculation of the deal has been around the fact that T-Mobile's data plans have typically been less expensive than AT&T's data plans, but consumer data plans that accommodate gigabytes of monthly data are far different than an alarm panel communication, which could be just 15 or 20 bytes of data, according to DMP's Hillenburg.
Although both Welsh and Hillenburg speculated that the merger could speed adoption of 3G and 4G technologies, Hillenburg said it's not likely that the pace of technology change would be so fast that the stable 2G technology environment used today by our industry would be dropped. Hillenburg said that there is still a huge possibility of growth for M2M communications and remote connectivity at machines/electronic devices like alarm system panels. He noted that it is quite likely that a company like AT&T would continue to support that 2G/GSM standard so as to continue to tap an emerging marketing for affordable M2M communications.