AT&T Digital Life: Industry threat or stimulus?

Telco ramps up market entrance


As AT&T continues its foray into security, it seems they have upped the ante, forging quickly into new geographic markets. But the real effect probably hasn’t been felt, or has yet to have been perceived by alarm dealers in these key markets. The question is whether they will have the level of service that independents in our industry thrive and survive on—or whether they will simply create new awareness of the value-add solutions available in the marketplace.

Of course, time will tell but for now it seems AT&T has certainly stepped up its game. Just last week, AT&T reiterated that it has launched its home security and automation service in 15 cities, and that it plans to roll out the offering via cell phone stores in markets including Los Angeles, Chicago, San Francisco and Miami. Previously, the company announced initial rollouts in Dallas and Atlanta metropolitan area.

The announcement isn’t new—but it seems AT&T may be more aggressive in its position and pursuit of new markets. The industry has felt the sting of new competition in the past—such as when the spun off RBOCs entered the market—but with the current saturation of AT&T in the telephone, wireless and Internet business—they may have gained new strength from a massive core of existing customers.

Atlanta-area based Ackerman Security Systems has been witness to the first onslaught by AT&T, but doesn’t necessarily view it as effective. “The launch has been pushed back multiple times, signaling challenges for AT&T,” said Jim Callahan, president of Ackerman Security. A UL-listed central station monitoring company, Ackerman Security has been in business since 1967.

“In fact even here in Atlanta the launch beyond employees is now scheduled for May 1 after several missed dates. It remains to be seen what impact they may have. I think they will create an additional awareness of the products and services now available to homeowners that enable them to stay connected to their home using smartphones, tablets and the like. This increased awareness from whatever the source is good for the security industry as a whole. In my opinion security companies are better equipped to provide the ongoing service necessary resulting in a lasting customer relationship which is a key to long term success.”

Callahan commented that the AT&T go-to-market strategy of using dealers and subcontracted labor for install and service has proved challenging to those who have attempted it before, including AT&T, who vacated the security business in 1998 for this very reason. “As is always the case, business planning requires execution. We’ll have to see how they do with both,” he said.

Brad Morehead, CEO of LiveWatch Security LLC in Evanston, Ill., concurred that it does appear that AT&T's push with Digital Life is accelerating with some saying 15 markets now and 50 markets by the end of 2013.  “If that's true, that's about 20 percent of the 210 U.S. markets by the end of 2013,” he said, adding that this is after years of speculation about how and when they will enter the market.

“At LiveWatch, we believe that companies like AT&T and Comcast will raise awareness for home security and automation which will help increase the entire industry's market penetration beyond the roughly 20 percent level where we have been stuck for decades. Very few customers that we talk to mention any of the utility companies as a viable source for home security. Companies like Comcast and AT&T are accustomed to competing with a handful of players in the oligopoly or monopoly markets they serve. There are more than 14,000 security companies throughout the country and I think that if we, as security industry professionals, do our job, then our industry may prove more competitive than the infrastructure-intensive wireless, cable and phone industry oligopolies they are accustomed to.”

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