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  • Writer's pictureTeresa Mastrangelo

AT&T Jumps on the Home Security/Automation Bandwagon

On Monday May 7, 2012, AT&T announced plans to launch a home security and automation service called Digital Life – a service that was previously demonstrated at the 2012 Mobile World Congress shown in Barcelona.  The service would provide professional 24×7 security monitoring as well as support a variety of devices for home automation applications such as remote video monitoring; remote lighting and thermostat control; appliance control; door lock control; water/flood monitoring; as well as emergency alerts – to name just a few applications. 

The sensors and camera devices will wirelessly connect to the IP-based AT&T Digital Life platform (home control hub) inside the home via Wi-Fi and/or Z-Wave, while a 3G mobile  broadband connection will provide the link back to AT&T’s security monitoring center.  According to early reports – the fixed broadband connection can only be used as a back-up link – due to the fact that it is unmanaged and therefore not considered secure.

Customers will be able to access their Smart Home service through a Web portal or wireless device app. 

The cloud-based service will leverage its 2010 Xanboo acquisition – a company in which AT&T and Motorola were key investors and which Motorola had an OEM agreement to rebrand under its HomeSight product line (prior to Motorola’s acquisition of 4Control)

Second Time a Charm for AT&T

What is interesting about this announcement is the fact that AT&T tried this once before in 2006 via its Cingular Wireless division.  At that time, the service was a $9.95 per month add- on to existing wireless plans.  The service never garnered any mass appeal and was quietly removed from the product lineup.

Thus far, AT&T has provided no guidance on packaging and pricing – however, competitive services run anywhere from $29.95/month to $59.95/month depending on the features and capabilities provided and all of them require a minimum of a 3-year monitoring contract.

AT&T is apparently investing heavily in this segment through the establishment of a Digital Life business unit within the emerging devices unit of AT&T Mobility.

Joining the Home Automation Bandwagon

These types of services are currently being offered by operators such as Verizon, Comcast, Time Warner Cable, Rogers and Comporium Communications – to name only a few.  In general, operators are looking for new vertical market segments to generate additional revenue, as new subscriber growth levels off.

AT&T is differentiating its service from the pack in a few distinct ways.  First, it is 100% cellular for both the monitoring communications and remote access features; second, it does not require users to be customers of AT&T; finally, it will offer this service on a nationwide basis – while most of its competition is currently limited to its regional/broadband footprint.

As stated earlier in this post, AT&T will be using its 3G network to transmit the data back to the monitoring center.  The greatest benefit of this is the fact that the entire system is less likely to be the victim of power outages – which greatly impacts a fixed broadband network. However, the customer will likely use its fixed broadband connection for the in-home network to connect multiple devices, either via Wi-Fi or through HomePlug adapters. 

Another differentiator is its use of Xanboo.  Most of the current solutions, including ADT rely on iControl for its software, while Verizon is utilizing 4Home (via Motorola).  Xanboo was the first to offer a cloud based service for security and automation, holds multiple patents in this area and offers an SDK which allows for third part development/applications.

ADT has a target on its back

So the real target is ADT and its ADT Pulse service.  According to Tyco Electronics’ latest filing with the SEC – ADT security services supported 6.432 million customers with ARPU of $37.98/month – generating nearly $3.5 billion in annual revenue with nearly 87% of that recurring.  Therefore, it is not surprising that AT&T and every other broadband operator would like to have a slice of that pie. 

However, it should be duly noted that ADT experiences significant churn – averaging 13% per quarter for its security service.  Part of this is certainly the result of people moving, but alot is also related to the ability to afford this service. Another fact – ADT’s customer base has stayed relatively flat for a considerable period of time and only a very small portion – approximately 100k have signed up for the ADT Pulse service.

Home Monitoring/Automation Does not Come Cheap

Installation runs on average $199 and typically includes some basic devices, such as a couple of motion detectors and window sensors.  The more devices – the more expensive the installation.

Indoor/Outdoor cameras, glass-break sensors and motion detectors run around $149.95/each, while window sensors run around $99.95/each.  Start adding intelligent outlets and such and you can see where spending $4,000+ would not be unreasonable for the average household.

The Challenge

AT&T is hardly synonymous with home security, and will have its work cut out to establish a knowledgeable and efficient installation workforce and call centers.  Not an impossible task, but it will certainly take time to train and certify operators and installers.

Clearly, the limited trials in Atlanta and Dallas, will enable AT&T to identify the gaps in its solution before rolling it out on a wider scale.  Additionally, it will have to make sure it complies with UL 827 (Central Station Alarm Services) for insurance purposes and obtains the appropriate licenses to provide these services within each state.

Unlike a home broadband network – home automation and home security take things to a new level.  Will AT&T be able to handle the customer service requirements that come with supporting things like cameras, light switches, door sensors – especially when they don’t work properly?  Honestly, support of this type makes more sense coming out of the wireline division rather than the mobility segment – the wireline techs already have to deal with installations and failures.

Finally, the real challenge will be customer acquisition.  Can AT&T establish the level of trust required with its consumers to allow AT&T to become their home security provider?  Time will tell.

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Mar 22, 2022

I was not aware of these home automation systems earlier but after the installation of smart locks by locksmith near me, i came to know a lot about it and i am happy that i decided to do home automation.

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