“POTS is going away, and I have a problem,” admitted Mike Miller, vice president of Moon Security. Miller, a past president of ESA, said some one-third of his customers are 2G and his sales people are currently contacting those subscribers to get them to transition to other technologies. “At the same time, we will get them to upgrade their control panels,” he said. “Some of the subscribers will be able to use their same control panels and just switch out the communications module; others will have to get new control panels. We are being proactive in our customer touches. Also, if someone calls to cancel, we are working on a program to give them a $50 per year technology credit for up to five years so that they can use it to add interactive services rather than just lose them altogether as a customer.”
Miller said that first and foremost, attrition is what the company worries most about with the end of 2G and POTS. “But overall it’s a good opportunity— to see our existing customers, sell add-ons and upgrades, update contracts and make good customer touches.”
Sam Fiske, general manager and chief operating officer of Smoky Mountain Systems, said that his western North Carolina service area is rural America and it’s a different market. “The technology is behind in our market and it’s an even greater continuing challenge with POTS lines going away,” he said.
Maria Malice, vice president of COPS Monitoring in Arizona, said that the third party monitoring provider is already set up to receive any or all 3G and beyond radio signals, but the biggest dilemma is to get their installing dealers on track with their customers.
“When the area codes split in our region, dealers had a year and a half to change over their accounts, but there were still problems when it happened. The biggest concern is that our dealers have to get out and touch their customers about this—we don’t know when it’s really going away, 2G or POTS. But in Tucson, 2G is already gone!” she said.
Malice said that if dealers aren’t paying attention, they will be hit hard. “The other issue is dealers moving their customers from POTS to VoIP lines. “Some of their subscriber panels aren’t communicating any more. They might have to change out their panels for this as well.”
Bob Ryan, senior vice president of Sales & Marketing for ASG Security, said as far as the demise of 2G, the company has been focusing on its new systems installations. “Every new system we install can communicate at least with 3G,” he said. “But in essence, this is all about buying more time, isn’t it? We always have to change with new communications technology, like the demise of POTS. So now, our path to get out of POTS is selling enhanced services and 100 percent wireless. But instead of the end of POTS, we are talking about the enhanced services, so you don’t have to have the discussion on the end of POTS. It’s a Trojan horse. When we upgrade customers, we are making a stickier customer.”
Chet Donati, president of DMC Security, admitted that it is a hard endeavor to change over customers, but they’ve had their eye on ever morphing communications technologies and have been doing a lot more cellular signaling. “We have been relatively proactive and when a customer calls for an upgrade they are pretty understanding about changing out the lines. But theoretically, a lot of us will get caught with our pants down.”
McVeigh worries that many of the smaller companies, which make up the vast majority of alarm dealers, could be caught off guard.
“And that is the frustrating part for me is what to do with those guys because they’re the vast majority of our membership – a couple of guys in a truck trying to eke out a living,” McVeigh said. “They may have 500 to 1,000 accounts out there that they are using to build their nest egg for their future, but the communication providers are coming by and pulling the rug out from under them. They may or may not realize what is happening. That’s the hard part.”
McVeigh said not picking an alternative communication technology to POTS isn’t an option because dealers are going to lose and have been losing them for some time now. “You need to change. You need to move off of this one,” he said. “This isn’t something you just let the younger kids do. You either need to move and do something different or sell your company to somebody that will.”