AT&T's Home Security Service to Go BYOB

AT&T Inc. (NYSE: T) is prepping the national launch of a home security and automation service that will apply pressure on the market's leading incumbent, ADT Security Services Inc., and put it in the running with MSOs and other telcos pursuing the space.

The new service, called Digital Life, will let customers use a range of IP-connected devices, including PCs, tablets and smartphones, to remotely handle home monitoring and security tasks such as setting temperatures, responding to alarms, locking and unlocking doors, and accessing security cameras. The system will feed data and provide the automation via a mix of Wi-Fi and Z-Wave on the wireless end, as well as with home wired broadband connections.

In a twist that will set up AT&T to market the service anywhere in the U.S., the telco is leaning on a "bring-your-own" model that lets customers use any broadband ISP or wireless carrier to access the Digital Life service. Most cable operators that already offer similar services require customers to get broadband from the MSO. Verizon Communications Inc. (NYSE: VZ), however, is using the bring-your-own-broadband approach for its home security/automation service too.

AT&T plans to trial Digital Life in Dallas and Atlanta this summer, followed later by a nationwide launch. The company has also set up a separate Digital Life business unit to run the new service. AT&T will own and operate Digital Life's security monitoring centers.

AT&T signaled its intentions for the market about two years ago when it acquired Xanboo Inc., a pioneer in the home automation market. (See AT&T Dives Deeper Into the Smart Home.)

Why this matters
Home monitoring and security has become a hot area for service providers as they seek out new revenue-generating services and growth opportunities. Several other North American telcos and MSOs, including Verizon, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Rogers Communications Inc. (Toronto: RCI) and Cox Communications Inc. , are at various stages of deployment. Among them, Comcast intends to have its Xfinity Home service deployed to most markets by year's end.

While they're all going after a somewhat fragmented market led by ADT (the top three providers represent just 30 percent of the market), questions have emerged as to whether there are enough revenues and profits up for grab for large service providers to turn home security and home automation into material businesses in the next five years.

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— Jeff Baumgartner, Site Editor, Light Reading Cable