Subscriber Discussion

What Will The Burglar Alarm Industry Do When No One Has A Landline Anymore?

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Ari Erenthal
Jan 10, 2017

The burglar alarm industry is deeply in love with landlines. While cellular radios that can connect to alarm panels are available as optional add-ons, they are generally used as backup communication, with telephone being primary. The ESA maintains this pro-con list that an installer can use to steer a potential customer towards using telephones.

On the one hand, telephone lines are incredibly resilient, even in a natural disaster. They haven't changed much since the early 1960s, so 30 year old alarm panels are just as compatible with central stations as brand new panels are. And they're cheap. A landline can be had for as little as $15 a month, assuming a customer doesn't already have one and assuming they don;t get some kind of package deal with their internet or television service, and the average cost to the consumer for monitoring is about $30 a month.

Cellphone radios, on the other hand, come in multiple formats with different coverage areas. That means that an alarm installer will need to offer one customer a 3G radio and another customer an LTE radio, while having to upgrade a third customer's 2G radio. They also require power to operate. Customers living in rural areas may not be able to use cellular at all. Average cost to customers for data service is ~$15, plus ~$50 for the monitoring. 

However, the number of landlines keep dropping. More than 40% of households don't have a landline at all, and that number keeps climbing all the time. At a certain point, telling a residential customer "get a landline if you want service" just won't fly anymore. On the other hand, for a lot of customers, $75 a month is going to be tougher to swallow than $30.

How should the alarm industry get in front of this?

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UI
Undisclosed Integrator #1
Jan 10, 2017

We love cellular and push it hard over landlines. why pay telco when you can pay us. <3 RMR

People understand that mediacom and comcast suck and all we have to do is mention reliability and they jump onboard 

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Ari Erenthal
Jan 10, 2017

Hey, it's not my stance. It's the industry's. I just linked to the ESA's site, the one they maintain to show customers. There's also a little matter of it costs more, which adds up. You think the customers are going to be okay with that?

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John Bazyk
Jan 10, 2017
Command Corporation • IPVMU Certified

A few years ago we started installing alarm panels with both network and cellular communication. Network is the primary path and used for mobile app connections. Verizon CDMA is the backup. We almost always use integrated cellular radios that can be replaced if technology changes. If the power is out cellular will continue to work using the panels backup battery. We have over 1,000 cellular radios in the field, all but 5 or 6 are Verizon.

For existing customers on landlines we're installing a takeover cell module on their existing panel to continue monitoring it for a very reasonable price or upgrading them to new systems. Commercial customers are pretty easy to convince to upgrade. Residential customers are a little harder, but we will give them one or two home automation devices and the app, and they're happy to upgrade.

This is a great opportunity to touch base with clients see how they're doing and get them on another contract.

On the other hand, for a lot of customers, $75 a month is going to be tougher to swallow than $30.

This really isnt an issue, commercial customers are saving anywhere from $75-$200/month by not having two phonelines for commercial fire alarm monitoring. Residential customers will save a modest $15-30/month. Either way moving to cell is a good deal for them. Through in all of the cloud access to the system and they're sitting very happy. I regulary get $52 to over $100/month per system. If you're providing good service and a great system with an amazing UI. It's an easy sell. 

I wrote a little something on this a while ago. 

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Ari Erenthal
Jan 10, 2017

John, how would residential customers save money? Do residential customers really need a dedicated line for alarm?

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John Bazyk
Jan 10, 2017
Command Corporation • IPVMU Certified

We have residential customers who call us every day asking if they can finally cancel their phone line. Many of them no longer use a home phone and have only kept it for the alarm system. They pay us less than they pay for phone company and get a lot more out of the system including more reliable communication. 

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Buddy Carmichael
Jan 10, 2017
AVS Design Concepts

Ari I can clear up a little confusion here. Your cost figures for residential service are a little high. The $50 figure you have would typically include the cell channel and maybe even Interactive Service (remote control). Cell channel only runs from $8 to $15 trending towards the lower end of that. Monitoring alone is around $25 plus or minus and then the customer can choose the comm method that best suits their needs and budget. And also, bear in mind that the cell channel is considered a little more reliable and secure than land line so it's worth a few dollars more per month for the extra security.

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Ari Erenthal
Jan 11, 2017

Good feedback, Beau. Is that nationwide average, or...?

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Buddy Carmichael
Jan 11, 2017
AVS Design Concepts

I'm in Tennessee so I don't know that much about the rest of the country, but several of the players here are national outfits (ADT, Proection 1, etc.) so I guess those numbers are fairly representative.

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Joseph Marotta
Jan 10, 2017
IPVMU Certified

Five years ago I moved into my current home, and Post Alarm installed a new system with cellular as primary connection.  I don't have a landline.  The system also can connect via my internet router, but it won't be convenient to route a cat-6 cable from the alarm panel to the router.  I pay $30/month and it works just great.

UI
Undisclosed Integrator #1
Jan 10, 2017

I edited the part where I disagree with you. 

But it seems a bit outdated to say we are not in front of this. We have taken it in stride and see it as an opportunity to increase rmr. Customers rarely complain about cost because we usually cost less than what they were paying for the landline that they only had for the alarm anyway. $15 is not a lot of money these days. In fact, we have really only been charging $10 for the service. 

We don't charge anywhere near $50 per month for monitoring either, about half that. So our monthlies are not so far off the major telcos, the problem there is the install charge. 

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UI
Undisclosed Integrator #2
Jan 10, 2017

Ari, not sure where your information is coming from that landlines are the industries stance.  We sell a lot of cellular and IP communicators now days.  That's not to say we don't have a large install base of landlines but there is no push to keep selling landline dialers in fact the opposite is truer. 

U
Undisclosed #3
Jan 10, 2017
IPVMU Certified

I'm confused, can't new panels connect to central station via the internet?

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Ari Erenthal
Jan 11, 2017

You can buy add on modules to send Contact ID or whatever over IP, but most panels with which I am familiar have a POTS interface built in and that's it. 

U
Undisclosed #3
Jan 11, 2017
IPVMU Certified

Well, making that feature as common as POTS would be one way to answer this:

How should the alarm industry get in front of this?

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Buddy Carmichael
Jan 11, 2017
AVS Design Concepts

Yes - well they are doing that, although not at a fast rate. When I first started in this business in 1989, the first alarm panels with built-in phone interface were just hitting the market. Prior to that, you added a "Digital Communicator". Fast forward 20 years and you are now seeing the first few systems that include a cell radio and don't have a land-line phone connection anymore. I think 2Gig is like that and also the DSC Touch (which is really somebody else's product) - but these systems are what's called "Self-Contained", that is they don't have a metal box with the main board in it hidden away somewhere. Instead the brains and radio and everything is right there with the keypad - it's all-in-one.

When will "Conventional" systems with brain-box and separate keypads start coming with cell and networking built-in? Hard to say. The electronics for a phone connection is dirt cheap compared to a cell radio or network port, so some of these systems might not really change that much for awhile yet.

But the industry doesn't really need to "get ahead" of the loss of traditional POTS lines because it's just a slowly evolving situation and the industry has solutions which will work on whatever communication method works best for the customer.

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CR
Chad Ray
Jan 11, 2017

I have only been in the industry about 5 years and most of my clientele is residential and light commercial.  In the area I live and in that arena I find the opposite to be true.  Everything I install and see is cellular.  2 GIG is popular.  I guess the ironic thing about that is I am in West Virginia where we pipe the sunlight in and just recently  was introduced to indoor plumbing!  Rebuilding from the Hatfield and McCoy thing has been tough on us!

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MC
Marty Calhoun
Jan 11, 2017
IPVMU Certified

 

The landscape will be completely different. I remember when Tape Dialers were all the rage, then Digital communicators changed the whole deal. Now the way its going with interactive technologies its a standard progression, no big deal when POT are gone, everything will be wireless very soon so it will be more akin to the 2g sunset.

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Mark Jones
Jan 11, 2017

Like UD1, we very strongly recommend cellular now.  Among other things, and there are other advantages, it saves us truck rolls.  Dial up could not do that.  Commercial networks could not do that.  Cellular is our future no doubt.

oK
oleg Kush
Jan 11, 2017

Concerning residential, I will commention about landlines.... in chicago suburbs... it's 99% free from old " land lines"... they all come from digital services such as comcast or att. In some villages per registration permit cellphone connection is required 100%

Landlines or their digital alternatives are not even option in 70% of our installation.

VC
Vlad Craciunescu
Jan 12, 2017

This sounds like an American discussion ( not a bad thing ) . To add a bit of "international" to the topic : in Romania i think 99% of panels sold are monitored by 2G or 3G cell connection or IP, both in residential and commercial applications. It's been like that for 5 yrs+ so it would be hard to connect a customer via landline if he asked for it. And we do have quite a lot of "regular panels" with IP and/or GPRS/3G communicator inside. Jablotron and Ksenia are two producers of these which we know ( and sell ) but many others exist.

There are IP monitoring solutions for the ARCs, SIA IP DC09 protocol seems to be a standard which could become the new Contact ID.

So, as technology is most of the time "universal", i guess it is a matter of time until US installers and end-users switch to "the new technology",  of course in a form which fits your market and available connections.

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UI
Undisclosed Integrator #4
Jan 13, 2017

Supervised Wi-Fi! 

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