Home monitoring could offer high-growth revenue for cable

Home monitoring and security could represent an important new high-growth revenue stream for European cable operators, attendees at the CTAM Europe EuroSummit in Vienna heard on Friday.

Market studies in Switzerland showed that interactive home monitoring systems would appeal to between 21-28% of homes over the next four to five years, according to Markus Doetsch, executive vice-president and head of smart living, Swisscom, speaking on a panel session on Friday.

Doetsch said people were increasingly organising their lives around their smartphones and it was only a small step to extend this to using these devices to monitor and control their homes. He said telcos and cable operators were well positioned to deliver these services. Swisscom’s Smart Living product provides subscribers with three interfaces to interact with the home – via smartphone, the web and a dedicated touchscreen device interface. Swisscom provides a dedicated wireless home device as the key device for interacting with the home.

Home monitoring and security is already big business in the US, where there is a greater emphasis on the home security element. In Europe, home energy monitoring is seen as providing greater potential. In addition to energy monitoring, Swisscom does provide a home security service but not as a default option.

Swisscom also offers its service as a hosted white label service to third party operators, including cable providers, and plans to offer it internationally next year. Doetsch said utility companies were one of the groups teaming up with Swisscom to offer the service.

About 40% of US homes are now equipped with ‘smart’ systems, according to Chris Stevens, vice-president of home monitoring software provider iControl, speaking on the same panel session. In Europe about 30% of homes have such systems, he said.

In western Europe, the services business associated with this is expected to grow to US$2 billion (€1.54 billion) over the next five years.

In the US, monitored home security systems have about 20% penetration, generating ARPUs of up to US$30. This represents a strong opportunity for cable operators, said Stevens. In western Europe there has been a greater concentration on home and energy management. There is an opportunity to market ‘stay connected’ systems to homes that have not yet purchased home security systems, he said.

Over half of purchasers of systems are women, said Stevens.

In the US, Comcast offers Xfinity Home Security, available nationally, while Time Warner Cable Intelligent Home Service is available on a rolling basis in selected marekts. Cox offers Cox Home Security for US$40 a month with a US$99 professional installation. Verizon FiOS offers home monitoring and control without 24-hour alarm response for US$9.99.

US research has shown that 6% of households without security are willing to pay US$10 additionally for energy monitoring, according to figures cited during the session by Duane Dick, senior partner at Sand Cherry Associates.