The GSM discussion rages on! What's next for security in the face of changing communication pathways?

Over the past couple months, I've noticed a real discussion going on through the social media outlet LinkedIn (if you're still sitting there thinking social media is just MySpace and for teenie-boppers to post drunken party pics and posters of their favorite hip-hop stars… well, you're only partly right… but seriously, catch up and start taking advantage of this multifaceted business intelligence tool). The Alarm Monitoring Group, of which I'm a member has hosted a lengthy discussion of a possible GSM sunset.

Following is a rundown of the chatter.

It all started two months ago when Bold Technologies president Rod Coles asked if anyone knew anything about the possible sunset of GSM.

I have heard that GSM is going to be phased out, has anyone else heard about this. Does anyone know the time-line and how it might affect our industry?

This simple question has elicited a string of 22 responses. This is obviously an important discussion and one people care bout.

Mace CSSS' Morgan Hertel spoke up next.

There is no defined time line but those closely connected seem to think that 2G and 2.5G will likely phase out in the next 5-7 years with 3G and 4G continuing on.

Clearly this will effect the industry to a point, but the industry needs to understand that technology is moving fast and there is no forever when it comes to communication methods, eventually we will be using IPV6, so we will have to replace the legacy ethernet, POT's will be gone or unusable in the next 5-7 years as well.

Morgan raises a valid point about technology. We're entering into a period where technological advances will probably outpace our marketing departments' abilities to wring maximum ROI out of each new permutation. In geeky science fiction circles (such as the ones I inhabit in my free time), this point of exponentially increasing technological advancement is sometimes known as the singularity.

Rod came back with a valid response.

So how do you avoid paralysis? There is no wide scale alternative to GSM right now, but customers will be concerned about installing technology that will be replaced. Alarm systems have traditionally been installed and then left for decades!

I assume CDMA is going the same way?

Part of the problem here is that the security industry has grown up with a pretty much five nines dependable communications medium that hasn't changed much till now: the PSTN and POTS service. With the communications technology continually advancing, the industry will have to develop a new business model based on upgraded tech whenever it becomes available. It means more homework for the integrator, but ultimately more contact and opportunity to prove value, as well.

Morgan responded to Rod's concerns and addressed the quickening technological advances and the need to adapt:

Not sure how an industry evolves… We know that cell phone providers have the entire handset base change in 6 years or less, no one has a cell phone for more then a few years, in fact not many people have a TV more then that now.

The alarm industry has enjoyed a much longer time in the field, but that has to change and in many cases it has, control panels today are 25% of what they were in the 70's and many now have modular communicators that will be field replaceable when the time comes.

Right now 2G and 2.5G GSM modules are really inexpensive but 3G modules cost more than most control panels do in the $100 range, 4G modules are over $300 even in bulk, dealers are not going to pay for these today, over time they will be cheaper because of the volume.

CDMA will move to WiMax for Sprint and LTE (Long Term Evolution) for Verizon, the good new is that these platforms will share the same hardware but will only have different software so that panel manufacturers will only have to stock 2 types of hardware.

The only other way to deal with not having to replace communication platforms will be to either invest in systems like AES or for the alarm industry to invest in satellite systems that will be up for a much longer period in time because if we continue to ride on the back of other technologies then we will have to deal with the changes and evolution that are thrown our way.

In the mean time dealers, central stations and automation vendors need to be aware of the upcoming changes and plan accordingly.

Well put, Morgan. I actually spoke with AES' Mike Sherman a while back and we discussed the communications pathway at length. I was actually speaking with my colleague, Martha and UP publisher Tim Purpura the other day and I was speculating that the development of a communications pathway owned and controlled by the industry and used specifically for alarm signal transmission and associated data (video, two-way voice, etc…) would maybe be the next big thing, maybe with the birth of a new association.

Monitor This! regular commenter Steve Nutt then threw in some input:

It's strange to think that the hundreds of thousands of 2G cellular devices being installed today may have to be replaced in 5-7 years time. I'm sure a lot of customers would think twice about installing 2/2.5G cellular equipment if they knew about the looming sunset.

It's hard to imagine that the 2G sunset will be upon us before the POTS sunset, so it's certainly something that the security industry should be made aware of. Thanks for the Heads Up Rod - I have to admit that this was the first I had heard of it.

Roger Kay from the UK's Northern Monitoring Services chimed in next.

It's interesting that the big problem facing PSTN (POTS) in the UK - the BT 21 Century Network rollout - has been put on hold by BT basically because it's too costly to implement. We're actually seeing a small shift to Installers actually increasing their fitment of 2G GSM communicators because of the problems with round trip delay caused by Least Cost Routing and other issues on the PSTN network meaning that Digital Communicators are dialing multiple times (increasing end user telephony costs), or in some cases not connecting to the ARC's RX's.

To which Steve Nutt had a response…

Hi Roger,

Yes, 21CN was a flop - just like the England soccer team

Interesting how installers are using GSM as opposed to IP.

That is a good point… not about England's soccer team, about which I know nothing, but about the tendancy toward GSM rather than IP… IP's certainly the pathway that's getting the most development dollars from the government.

Morgan had some things to say about the somewhat concurrent sunsetting of POTS and 2G GSM.

POT's is already sunsetting, either by market forces or social habits but its alreay going away at 700,000 lines a month. 2G will sunset over the next 5-7 years only because as more mobile devices get out there carriers will need the spectrum to operate.

As long as manufacturers work on engineering repalceable and/or scaleable RF componants this will not be to difficult, it will be short truck roll to deal with it.

Steve came back with a question about VoIP, which many consumers are going to for phone service.

At 700,000 a month - why are we all still in the alarm business when we should be in the VoIP business?

How many landlines are still out there in the USA and how long will it take to remove them all at a rate of 700K a month?

Steve is, of course, referencing the numbers from AT&T's report to the FCC concerning the POTS sunset timetable. Morgan raised a valid point next:

Not sure, that's AT&T's published number, keep in mind that this includes things like Verizon selling off residential service on the east side, and AT&T moving millions of customers to U-Verse etc.

POTS may not have an official sunset but like platform shoes its going out of style quickly.

What's wrong with platform shoes? I'm only 5 feet 6-and-a-half inches… I need every edge I can get. Basically, though, none of us has a crystal ball. However, we can be sure that people nowadays want the “next big thing,” especially when it comes to tech.

Steve threw down next with some speculation.

As I have had more time to digest the fact that both POTS & 2G are definitely on their way out, it has started too sink in that this is HUGE for the security industry. Luckily, Dan Gelinas from Security Systems News is already onto it and I'm confident that he will not let this news drop too far from the headlines.

There are two ways that this news will be handled by the industry. Firstly, there will be people like myself, Rod, Dan, Morgan and others that will not sit comfortably with promoting a technology that is expected to sunset in 5-7 years. Then there are the ones who will see this as a money making opportunity whereby they can upgrade POTS systems with 2G systems knowing full well that they will have to upgrade them again in the not too distant future.

This is where bodies like the CSAA and others can justify their existence and educate the industry - just like they did with the AMPS sunset and when VoIP appeared on the scene.

Good points, Steve. Now is the time for all members of the industry to get informed and educated. The associations are a great place to start, as is SSN, your best bet for real news.

Morgan came back with his opinion on using soon-to-be-obsolete communications pathways and reiterated some of what I've already said: The industry is using someone else's ideal communications pathway… there are going to be problems and there is going to be evolution. What the industry needs to do is get educated and communicate with the end users and take advantage of the opportunity for more contact. He also makes clear that everyone has a part to play.

I am not apposed to using 2g devices knowing they will sunset in 5-7 years, I think that would be an unfair statement, what I do think is that the alarm industry as long as they are knowingly going to be riding on someone else's communication platform will have to understand that technology is moving quickly.

2g is evolving to 3g, 3g will evolve to 4g, IPv4 is evolving to IPv6, its all changing all time, there is no forever.

The industry enjoyed 20+ years of dialers, but the next round won't go for 20 years, probably 10, which is why everyone needs to understand this.

Most of the manufacturers have gone back to modular communicators, so next round you will just swap that out.

Consumers are starting to understand this, that's why they get new phones ever few years, this will just extend to the alarm communications platform.

What our industry needs to do is tell consumers the facts, that they can expect to have to upgrade the platform every 7-10 years, smart marketers will start to build this into monthly fees and loyalty programs just like the phone carriers.

Where we run into trouble as group is that many sit back and say this will never happen, they don't plan, they don't train and when it finally gets to the 11th hour it's panic time.

Central stations play a big part in this but so do manufacturers, reps and other vendors.

Yours truly chimed in briefly to let the discussion contributors know SSN was, in fact on the case.

Hey guys,

interesting discussion here. (Thanks for the vote of confidence, Steve! :-)) You'll be glad to know SSN is doing a market trends piece for the August issue on the GSM sunset, SSN/SDN executive editor Sam Pfeifle's working tirelessly on it now.

Steve went on to agree with Morgan that the best policy is honesty… especially when dealing with the end user who's hopefully going to continue paying you your RMR. He also mentions the exponentially increasing importance of social connection as something that will drive a failure proof communications pathway so that everyone is always connected.

That's good Dan. Just the exposure something like this needs.

Morgan is right in that our industry needs to tell consumers the facts so that they can expect to have to upgrade the platform every 7-10 years. As long as consumers are kept informed, then there are no nasty surprises when the sunset finally comes along.

We already have a dualpath IP/3G product but with 3G rates at their current level of around $30 per month, it is not affordable for the majority of the residential sector. We advise our Dealers that it is only really useful for commercial customers that must have a redundant Internet connection for business continuity purposes. In other words, the cost of the wired DSL connection and the wireless 3G connection are valid business operational expenses and the alarm transmission paths are considered free as they just piggy back on what is in place already.

I see the potential for two things to speed the demand for 3G. The first is widespread industry adoption of video verification. As video images become a more integral part of an overall security solution, the risk of images not being able to reach the CS will become unacceptable. 3G is the most suitable backup path.

The second is a strange one - Social Networking. It is so incredibly powerful, I have a suspicion that the younger generation will soon consider a loss of Internet connectivity unacceptable and many will start using combined DSL/3G modems/routers for fear of “social suicide” (my teenage kids taught me that one).

Telular's Shawn Welsh had a lot to say about GSM communications.

I thought I'd add this small thought to this topic. The carriers are not commenting on this topic and it is somewhat alarmist to suggest that these networks are disappearing or “sunsetting” in the US in five years.

Yes, Gordon Hope (Honeywell's Alarmnet), in the SSN article suggested this was his opinion, but read this link, do a little extra research and form your own.

Something else to consider, the telematics and energy sectors (longer product lives than security) have all committed to using GSM in their products. Carriers would have had a very hard time selling these systems if they were preparing to shut them down in 2015.

True enough Shawn. The longevity of the pathway will most likely depend on how much money is being spent on its maintenance.

Steve addressed the situation with a few future-looking questions. He makes the point that all of this at the end of the day will be consumer driven. If the people who pay for it, don't want it or want something different, that's what will mater. Where the dollar's spent will make the decision.

Fair comment Shawn, you may very well be right and 2G may hang in there for a long time to come. The truth is, none of us really know for sure.

POTS may also stick around a lot longer than we think, but because VoIP provides consumers with a much richer experience, they are not waiting to find out. The days when a Telco can dictate the terms and tell consumers to “put up or shut up” are long gone. It's easy to vote with your feet these days.

Getting back to the future of GSM - does anyone think Google, Apple and RIM are busy thinking up ground-breaking new ways to use SMS on their phones, or developing apps targeted at GPRS?

Does anyone think that today's 18-year-old kids will have any interest in browser-less phones that only allow you to make calls and send SMS when they are setting up businesses and buying homes within the next 5 years?

I very much doubt it. 2G may still be around, but it will be of little interest to many. Forget terrorism, or world war III - if kids are still unable to watch YouTube videos on their phones within the next few years due to bandwidth constraints, we're all in trouble!

Whether or not the rejection of 2G will spill over to the alarm monitoring industry is anyone's guess. My personal view is that if we ever truly get out of this recession and video verification kicks in, then the days of unsupervised, 2G cellular alarm monitoring solutions will be numbered. They will cease to provide value to the consumer.

Finally, Simon Cross from the UK's Becatech chimed in with a challenge to see this as an opportunity. How can security totally reinvent itself?

If you think the alarm industry will have problems with the demise of 2G think of all the M2M operators out there with thousands of SIM's managing their machines. It's interesting that they can see whats happening. I saw a coke machine a year ago that had an Internet access screen that was delivering media messages and adverts and was an internet terminal for people to use. Also it had voip telephony and a cash machine. Now that is smart. The whole technology change had been turned into a profit engine.

What value can one add to a 3G alarm SIM. Pico cell? Internet? CCTV ? Home Automation, Weather reporting, Fully monitored 24/7 system for freezers in retail etc etc etc …..Lets get our thinking caps on and take a grudge purchase alarm system that only brings you bad news into something useful that delivers benefits through adding value.

Come on guys ….what do you think!

Rod then jumped back in and questioned the validity of phasing GSM out.

I wonder if there is a valid reason for phasing it out, i realize everything has a life cycle, but supporting old “stuff” isn't always a problem, if you don't change it and it doesn't fail then whats the big deal?

For example we have just shy of 400 customers on our Alarm monitoring software, about 350 are on our Windows Manitou platform but about 50-ish are on our old legacy Theos software. I have decided to continue to support the legacy software, it doesn't ever change so it is very stable. Ultimately the hardware is more difficult to find for it, and as the user base decreases the cost per user gets higher, ultimately there will be a point it doesn't make sense.

So I wonder why GSM is being phased out, is the decision for technical reasons or commercial, and who ultimately has the decision to make? It can't be because of usage, as there are millions of units.

Morgan answers that question neatly, pointing out that the winner will be the one the people want. And they vote with their money.

GSM 2.0 and 2.5 will phase out because of demand, while M2M may have have 100's of thousands of subscribers at $3 to $5 per month the real money is in the millions of handheld users averaging a $100 a month. its not complicated math.

But to Rod's specific question is that unlike your example with Theos, the pipe or spectrum available in very finite.

Imagine a toll road with 6 lanes, the first 4 of the lanes are dirt and mud and have lots of holes and bogs and the only vehicles that can do down those roads are big heavy slow tractors, the last two lanes are freshly paved roads, fast enough to go a 100 mph.

The consumer wants to go faster down the road, they are parking the tractors that only go 10 mph and getting sports cars. The carriers need to pave all the lanes in order to make the consumer happy and since they only get paid by the vehicle the carrier is has to pave the roads to make everyone happy,

The other problem is that the tractors cant drive on the paved roads because they slow down everyone else so ultimately if you want to take that road you will have to do it in a sports car.

This is non technical comparison but spectrum costs billions of dollars, annually and there is only so much room, just like lanes, so carriers have to follow the money to keep the consumer and stockholders happy.

Shawn agreed with Morgan, but questioned the speed with which the phase out will occur.

Morgan, I love your analogy because I just used a very close variant of it a month ago at the Rapid Response Users Group to explain this very topic. You're right the technology is going to phase out one day and the frequencies they occupy will be needed in the future.

I just disagree on the timing.

We have over 500,000 cellular customers and we are very concerned about planning for this specific issue. Our partner, AT&T, is working on a comprehensive technology road map for their plans on each deployment's life cycle. I can only say that currently they don't have an official comment, but they seem to suggest the the time frame is more like 10 plus years.

My earlier comments on the telematics and energy sectors providing some protection to a sunset is that I understand they have negotiated contractual obligations for these networks to remain in operation for a specific term.

Also, Steve, your are right that people love data hungry applications; however, SMS–though it isn't sexy–is the most successful data application in the world and is a HUGE money maker for the industry. Every specification under consideration for deployment offers support for SMS, even LTE.

Compelling words Shawn, and compelling numbers.

Regardless of when it might happen, I think the important, repeated theme here is that technological change is not only imminent, but will be ongoing and probably exponential. The best thing anyone in the industry can do is stay educated, stay involved and stay fearless in the face of evolution.

The alternative is extinction.