As AT&T (NYSE:T) fights off challenges to other areas of its business, the wireless giant has decided to branch out into home security systems. The company launched its first packages in 15 locations across the U.S. on Friday, showing the company’s willingness to move on an industry where it sees growth potential.
AT&T sees its opening as phone and cable companies like Comcast (NASDAQ:CMCSA) provide similar services but contract outside vendors to deliver the security equipment. In the AT&T model, they will operate along the lines of security giants like ADT (NYSE: ADT), which provide proprietary equipment as well as the monitoring service to manage it. AT&T can go one step further and deliver a wireless contract through which the consumer can have 24/7 access to goings-on in and around the home.
At the heart of the company’s push into home security is the acknowledgment there are few remaining frontiers in the wireless world. While most Americans have a cell phone, estimates of the number of homes equipped with security systems are surprising. Some analysts say as many as 80 percent of American residences are not equipped with a security system. In these numbers, AT&T sees an opportunity.
Glenn Lurie, who works on expanding AT&T’s reach to other devices, called the effort part of a “billion-dollar opportunity.” The number is considerable, as the entire industry take is around $18 billion per year. Lurie referenced the emergence of affordable wireless cameras and other smart devices as a way for the company to move in directions ADT, for one, has trouble selling to most customers.
The belief is that customers willing to bet on AT&T technology for a home security package would be comfortable adding cameras, sensors and other types of extras, which would be controlled on a secure wireless network. AT&T has already established centers where operators would respond to the alerts generated by its systems. All in all, the company is presenting a full-scale solution to security, monitoring and communication, believing it can succeed where others have failed to gain traction. It will be in 50 markets by the end of the year.
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