Cablecos and Telecoms: Readers debate the new competition

Do smaller professional security companies stand to gain from the emergence of new players?
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Wednesday, July 10, 2013

YARMOUTH, Maine—Brand recognition, national reach and advertising clout are some of the obvious advantages afforded the telecom and cableco giants now entering the security space. But some smaller security companies may also stand to benefit from these new entrants, by virtue of both partnerships with bigger companies, and increased market awareness fueled by their advertising.

A recent study from IHS Research says the influx of new players will likely increase market penetration for residential intrusion alarm products during the next three years, but according to readers who took Security Systems News’ August News Poll, it’s not yet clear what effect the telecoms and cablecos will have on their businesses.

Forty-three percent of respondents said it’s too soon to tell what kind of impact the new players’ advertisements are having on traditional security companies. Those that did detect the influence of new ads were roughly divided on whether they were a boon (24 percent) or an obstacle (32 percent) to their businesses.

Similarly, there was nearly a 50-50 divide among readers on whether smaller professional security companies have an edge over the formidable new entrants. “They are here to stay and it will hurt the small companies not able to compete in this market, or without the capital to do so,” Troy Bruce, director of sales at LogicMark Emergency Response Systems in Louisville, Ky., said in his response. “As an industry, we have to find other means to generate RMR.”

With the big new competitors reshaping the market, more than one reader said adaptability would become paramount, particularly in the door-knocking model.

“With 15 years of experience selling door-to-door, we have always had our share of challenges to sell on the spot,” one reader said. “In this new era of telecom companies, the market will increasingly challenge us to adapt to getting the consumer to make a decision on the spot despite all the other options available to them.”

While adaptability for some readers meant reducing prices, for others it meant an emphasis on partnerships. However, a strong majority of readers who participated in the poll—67 percent—said their companies have not benefited from partnerships with a telecom or cableco, saying those companies already have their own technicians and central stations.

One reader, looking forward, said an adaptation of a different kind was in order. Smaller companies, the respondent said, stand to reap the windfall from broader advertising, particularly in the residential space. “I believe the big players will drive new residential businesses, so I think local firms need to concentrate on commercial accounts.”

Todd Lindstrom, director of Life Safety Monitoring in Munhall, Pa., was unsure whether small security companies have an edge over the larger players, or vice versa. He said that smaller companies will need strong service.

“They will need to be on top of their game as well as have a great central station to complete the package and compete aggressively against the telecoms and cablecos coming into the world,” Lindstrom said. “They will mainly be in the interactive realm and local dealers need to be aware of this and be ready to offer the services that the customer is requesting.”