Hosted Communications

Service providers, especially telcos, have long had a mixed relationship with home security. Some have seen it as a natural extension of the local phone business, or at least a related adjacency. Like some other adjacencies, it never has proven to be a terribly big business for telcos who have offered security services.

 

But there's more movement again, based in part on new IP technology that operates more cleanly as a broadband application and in part because service providers are looking for applications that enhance the value of wired access plant.

 

For some, home security now is a way to drive video surveillance services and bandwidth purchases. IP cameras now are affordable and easy to manage, creating a new value proposition in the video security area.

 

Home security also now appears as a lead application that could provide the foundation for broader digital home services.

 

"Home security monitoring service is the initial impetus," says Ucontrol CEO Jim Johnson. "But eventually we can use that as a way to enable the digital home."

 

The idea is to build on an alarm keypad that also can control thermostats, lighting, cameras and act as an information or communications appliance as well. Ucontrol envisions providing  weather, news, traffic and photo sharing, for example, as its system connects to the Internet.

 

The existing home security market represents $6.4 billion recurring revenue generated from 21.3 million homes, says Johnson. There's 15 percent churn and 15 percent new adds each year.

 

Average revenue is $25 a month and customers tend to stay connected seven years, on average.

 

Johnson argues cable and telcos have an advantage, as they tend to know somebody is moving. That means they might be able to sign new customers then for a fraction of what traditional vendors spend.