Rogers bundles its way into home security
I suppose that most of us by now have read the announcement that Rogers Communications is entering into the home security field. In case you have forgotten, Bell Canada has been there/done that. Let’s do a bit of a historical recap…
November 9, 2010 By Ivan Spector
Years ago in the United States the big fear was the RBOC’s (Regional Bell Operating Companies) entering into our business. AT&T for example had an ill fated program of wireless peel and stick type technology that was going to put all security alarm companies out of business. These inferior security systems died an inglorious death, as did the entire program. It did not go well and it ended even worse, especially for those clients who got “stuck” with those systems after a few years.
Back on the home front, Bell Canada made a foray into the alarm industry. After doing some acquisitions, they petered out and sold the business unit to the largest electronic security company in the world. Sure, they made a big splash but they could not continue their momentum in the marketplace. Guess what? They learned the hard way that this industry is extremely service-intensive, and at a highly personalized level – frankly not something that Bell ever specialized in.
How many homes have you seen where telephone wire is tacked up and around door frames, but alarm installers had better not show six inches of that JKT in their installations? Bell Guardium was no more!
So Rogers has decided to jump into this field, no doubt with whiz bang technology like information and video streaming (to continue to drive up the data plans), a greater range of services (to differentiate from other competitors in their core field) and service bundling (to make it more difficult to strip down and price out competitive services). I call service bundling by a different term — customer entanglement — since that is really what it accomplishes.
It remains to be seen if Rogers will be acquiring a monitoring station in the future. It would appear that an acquisition would be the most likely strategy, since a monitoring station infrastructure is quite specialized, as is the training and the running of a critical condition monitoring operation. The other question is, who will be doing the installation and service for this new entity? Security systems are at best a kitchen table sale.
Some of the functions — dimming lights remotely and programming your television — are not likely to generate much excitement from users or push clients towards this range of services that are currently web accessible. What Rogers does have however is a large client base, who if shown a value proposition may indeed continue to choose them as a supplier. But the cellular industry does not seem to be one with particular brand loyalty when it comes to service providers. Rather the attraction appears to be more hardware related. And there are not any real household names currently in the security hardware marketplace that will likely make that much of a difference.
It will be interesting to see how this plays out. We have seen so many players enter and exit the security Industry, with visions of recurring revenue in their heads. Reality however is very different.
Those that forget the past are doomed to repeat it.
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