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Jeff Barak

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The Next Billion-Dollar Business

AT&T's move into home security

The launch of AT&T’s home security and monitoring service last week should set the alarm bells ringing for traditional home security suppliers. Initially the Digital Life service is only being rolled out in 15 US markets, but AT&T has big plans for disrupting the $18 billion US home security market. As Glenn Lurie, head of AT&T’s Emerging Devices team, explained to USA Today’s Edward C. Baig: “We want to make this our next billion dollar business.”

AT&T is not the first service provider to enter this market in North America  – Comcast has its Xfinity Home monitoring service and Verizon has its Home Monitoring and Control system – and it’s probably not going to be the last: more service providers are likely to join them as they search for additional services they can offer customers to replace declining revenues from the traditional voice and text income streams, as well as to prevent customer churn. (Once you’ve entrusted your home security to a service provider, how likely is it you’ll switch carriers?)

In fact, home security and home automation – automated door locks, appliances lights and thermostats that can be operated remotely– is a natural field for service providers to move into.  After all, subscribers have already opened their homes to service providers in terms of receiving telephony, Pay TV and Internet services from them, so adding home security from a trusted provider requires no great leap of faith on the part of the home owner.

And importantly, it can also open the door for service providers to new subscribers: AT&T is deliberately choosing not to bundle its Digital Life offerings with its existing services for now, so while  Verizon and Comcast’s home security services require subscription to their high-speed broadband services,  AT&T’s doesn’t.  As AT&T Vice President and Illinois General Manager Dave Fine told the Chicago Tribune‘s Wailin Wong, AT&T “can sell this product to someone who’s not an AT&T high-speed Internet customer” and thereby expand its customer base.

Service providers in recent years have been disrupted by over-the-top players “stealing their lunch.” It’s unlikely that the traditional home security providers, who until now have managed to protect their turf, will enjoy the irony of service providers doing the same to them.

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Jeff Barak is the corporate editor at Amdocs and regularly posts on the company's thought-leadership blog Amdocs Voices. Before joining Amdocs in 2008, he worked in print journalism for more than two decades.