AT&T Expands Market to Alarm Monitoring

AT&T, the principal American cellphone corporation and one of the most famous firms all around the world, will begin offering home alarm monitoring services in Los Angeles and nationally to enlarge its market to seek profits beyond cellphones. This seems to be a tremendous challenge to ADT, home alarm monitoring industry head in the United States.

Several rivals of AT&T, including Verizon Communications Inc. and Comcast Corp., have broken into the so-called smart home field. And now AT&T joins them. This move reveals these cellphone and cable firms’ requirements for finding sales returns opportunities beyond the slowing wireless subscriber and pay TV business. Glenn Lurie, AT&T’s president of emerging devices, said that joining in the home monitoring field can be AT&T best option, because it’s still a fragmentary industry at present.

This service, which is named Digital Life, allows home owners to watch their households through cameras and turn on their households remotely by using computers or phones as well as obtain a 24-hour home monitoring service, AT&T announced the service today at the International CTIA Wireless event in New Orleans. The technology, which comes from Xanboo, a firm AT&T bought in 2010, uses its central control panel to wirelessly connect with residents’ cameras, lightings, thermostats as well as all the detectors in the homes.

The installation and services will be sold in AT&T stores, starting with trials in the next few months in Dallas and Atlanta. AT&T didn’t expose the fees.

According to research firm Current Analysis Inc., Tyco International Ltd. (TYC)’s ADT unit, the greatest home monitoring firm in U.S. dominates the home monitoring industry. And the Bloomberg data reveals that Tyco’s security business had sales of $8.63 billion in 2011. A security and monitoring package called Pulse from ADT is sold for $50 per month with a $200 installation cost. A similar monitoring and security package from Verizon charges $220 with a $10 monthly cost. Some other home monitoring firms make their prices much lower, for example, Los Angeles home monitoring firm provides its smart home security package starting at $45.95 per month with a $49 installation cost.

This new system can be a monumental leap for not only AT&T, but also the world marketplace. Although there are so many home monitoring firms in the marketplace, AT&T owns the advantage of its simplified user controls and advanced technology to let users operate the system through the Internet or smartphones from anywhere.

Since nearly every adult in America has already had mobile phones, and just one in five homes have home alarm systems, the motive for AT&T is to try to win a market share that still has plenty of room for growth.

One of the challenges AT&T faces is to offer its service without reducing the profit margins. As Bloomberg data shows, the operating profit of Tyco’s security-solutions unit was less than 16 percent in 2011, and more than 24 percent for AT&T’s wireless business. Los Angeles based AT&T is showing more ambition with its stated aim of selling nationally, rather than sticking to its home automation and security services in Los Angeles, as Verizon does. ”We have been evaluating the issue for a long time and it proves that AT&T’s Digital Life doesn’t harm profit margins,” said Lurie. “We have faith in growing revenue with this business”.