AT&T Entering The Home Security Industry (NYSE:T)

AT&TAT&T Inc. has announced the launch of its home security and automation service that will now be available in 15 cities across the United States. AT&T’s new packages, dubbed “Digital Life,” are being sold in cellphone stores in participating cities, including Los Angeles, Chicago, San Francisco and Miami. The company has plans to add 50 more cities to its rolls by the end of the year.

While there are other phone and cable companies that sell security packages, AT&T is taking a different path than its competitors by developing its own technology. The company has created a line of security cameras, thermostats and locks that customers can control from their phones and tablets. A central control panel controls the equipment and can be programmed through an app or Web interface. The company has monitoring centers set up in Dallas and Atlanta. AT&T eventually wants to sell its security packages nationwide, not just where it provides local phone service.

Security firms, such as ADT Corp., currently dominate the market for home monitoring and automation. The U.S. home security market is estimated to be worth about $18 billion per year, but only around 20 percent of homes have security systems. This provides AT&T with a golden opportunity to expand into and grow the market. AT&T currently earns about $127 billion in annual revenue.

The wireless industry has slowed after a decade of growth, as nearly everyone that wants a cellphone has one now. Wireless companies are looking for other sources of growth and expanding in to other industries. Glenn Lurie, who is in charge of expanding the reach of AT&T’s network to new types of devices, said, “We see huge opportunity here. This is a significant, billion-dollar opportunity for AT&T.”

Customers typically pay about $40 per month for home security alone. AT&T is hoping to charge more by providing connections to wireless cameras and other sensors. The Digital Life home security package will cost $250 for the equipment and installation, plus $40 per month for monitoring. Additional options are also available, including a camera package for $10 per month, climate control for $5 per month, and a remote water main shutoff control for $10 per month. A basic, security-only package will cost $150, plus $30 per month for monitoring.