Bundled home-monitoring system could help Rogers in security sector, analysts say

Bundling its upcoming home-monitoring product with existing services for customer discounts could help Rogers Communications Inc. in the security systems market, where BCE Inc. tried but failed, analysts say. “If it were my decision, because it is a sticky, long-term play, it would be interesting to do a bundle that included high-speed, TV, VoIP and security,” Roberta Fox, president of telecom advisory firm Fox Group Consulting, said in an interview. “I wouldn’t be surprised if Rogers does this.” On Nov. 3, Rogers CEO Nadir Mohamed announced company plans to unveil a home-monitoring service in 2011 called Rogers Smart Home Monitoring. The system will feature an interactive touch-screen console to manage security, lighting, temperature, appliances and media. “While the rest of the industry competes for a slice of shrinking pie, we’re also focused on growing a new one,” Mohamed said last month to the Economic Club of Canada in Toronto. “Canadians are looking for solutions to manage their interconnected world seamlessly, reliably and securely.” Unlike traditional alarm systems that operate on copper lines and only connect to a network when a problem arises, the Rogers system will be IP-based and offer real-time home monitoring. Rogers spokeswoman Carly Suppa said in an email the service will also deliver energy management and home automation tools, as well as home security over Rogers’ wired and wireless networks. Applications for the service will be available across a range of devices and will be supported by customer-service and response teams. Suppa said pricing and availability details will be available in 2011. Chris Diceman, senior vice-president of credit rating agency DBRS, said Rogers will likely bundle the home-monitoring service with its communications services to draw customers. “There is some merit to bundling. It reduces a lot of complexity for the customers. They can see the discounts right away. You’re dealing with one provider,” he said. By launching its new home-monitoring service, Rogers will try to succeed in a market where BCE has failed. In 1999, Bell created Bell Gardium, a product that provided “smart home” services such as remote lighting control and appliance monitoring. But BCE divested itself of the business through a series of deals with U.S. carriers. In 2007, BCE made a second attempt to enter the market when it unveiled Bell Home Monitoring. The service combined Bell’s mobile network, high-speed Internet access, and security devices, such as window monitors and motion detectors, to create a holistic home-monitoring platform. But Bell discontinued the service. “I think they lasted less than a year,” Fox said. In an email, Bell spokeswoman Jacqueline Michelis said she couldn’t specify why Bell stopped offering the service, but noted that all of Bell’s services must support the company’s five strategic imperatives. “We are focused on accelerating wireless, expanding broadband, improving customer service, cost-containment and wireline services,” Michelis said. Diceman said it’s possible that Bell left the market because the company’s network wasn’t ready to carry security services. “It could have been a case where the network just wasn’t ready. In the last few years they’ve been doing a lot of investing to get fibre out into the neighbourhoods. Likely the equipment and the software to offer that kind of service hadn’t evolved as well.” The timing might be better for Rogers’ home-monitoring product, he said. “A lot of these technologies have come a long way. Throw the energy equation in as well—not just home monitoring—and you’ve got ways to save on energy consumption. If you have an IP and wireless-based network, and you have these communications and energy monitoring services linked together, it starts to become a more compelling service than plain old security. That market seems to be fairly competitive.” Fox said home monitoring is a good market for telecom carriers because customers tend to be “sticky”—once they sign up for a service, they don’t cancel unless they move. But that also makes timing an important factor. “For most homeowners it goes in with the original build or when they move in,” Fox said. “You have to get to them when they’re moving.” Fox said she wouldn’t be surprised if more communications service providers enter the home-monitoring market. Mobilicity and Wind Mobile could follow suit with a wireless home monitoring product, depending on their network reach. “If they haven’t done the build-outs yet, they can only serve the core areas,” Fox said. “But they could do it as an add-on if you’re already a customer. It could be a second-generation product.” Ken Campbell, CEO of Wind Mobile, said his company is focusing on building its subscriber base of voice and data customers for now, but that doesn’t preclude the company from offering home monitoring. “Through sister operations, we’ve provided wireless facilities for the purposes of home monitoring ... It’s not rocket science. It’s been done in a lot of places before. There’s no reason why people couldn’t use our SIM cards, plug them into a monitoring device, and run it as a machine-to-machine application.” Regional telecom incumbents SaskTel and Manitoba Telecom Services Inc. (MTS) also offer home-monitoring services. In 1999, SaskTel launched SecureTek, which provides home monitoring and alarm services in Saskatchewan, British Columbia, Alberta, Ontario, and Nova Scotia. This year, SecureTek received the Central Station Alarm Association’s (CSAA) Five Diamond Certification for superior monitoring services. “We were only the fifth company in Canada to achieve the Five Diamond certification,” SaskTel spokesperson Andy Tate said in an interview. “It shows that we’ve gone from a new player to an industry leader.” MTS operates AAA Alarms, which primarily serves the consumer market in Manitoba but also provides monitoring for businesses across Canada. SecureTek and AAA bundle their home-monitoring services with their parent companies’ communications services for discounts. SecureTek offers monthly discounts of $5 to $10, depending on the package. AAA offers $3 off its service for MTS customers. Neither firm said it is are worried about competition from Rogers. “In any line of business, competition is a fact of life,” Tate said. “Certainly, in the security industry there’s lots of competition as well.” “We’re not concerned about Rogers,” AAA general manager Randy Williams said in an interview. “We’ve been competing in the Manitoba alarm market for many years ... and we’ll continue to evolve our product offering. We fully expect to maintain our leadership position.” news@thewirereport.ca

Bundled home-monitoring system could help Rogers in security sector, analysts say

News | December 22, 2010

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