Bell Canada withdraws from the alarm business

Thursday, December 20, 2007

MONTREAL--Bell Canada, the Canadian telephone and telecommunications giant, sent letters to its customers in November announcing it will discontinue its Home Monitoring security service effective Jan. 31, 2008, exactly one year after it launched the service. The company had sold its self-install home monitoring and security solution, which utilized Bell's high-speed Internet network, through its Web site and consumer electronic retail chain, Future Shop. Customers had the option of self-monitoring their systems via text message or email, or paying for professional monitoring services, provided by Bell Canada, for an additional monthly fee.
"This was Bell's first entry into the home monitoring market," Jeff Meerman, a Bell Canada spokesperson, told Security Systems News. "It was a relatively small business unit within Bell with only about 17 employees" and about 1,500 customers, he said. Bell discontinued the security service so it could "focus on its core products and services" such as its Internet, satellite television and wireless telephone offerings, he said. The company will fully reimburse customers for the value of any home monitoring equipment as well as any prepaid monthly monitoring services.
Bell Canada's withdrawal from the security business is not dissimilar to the experiences of other telecommunications companies who have tried to enter the security marketplace, said one industry observer.
"I've seen telephone companies get in and out [of the security business] for probably 15 years and very few are successful," said David Currie, president of Damar Security Systems in Ontario, Canada. "If you think about the technology employed in the alarm industry and the telephone industry, the alarm people do everything in series and the telephone people do virtually everything in parallel. It's a different way of going about business," he said. "If you call an alarm company you expect a live person to answer the phone in a short amount of time, with the telephone company, you expect to wait."
Although Currie admits there are certain similarities between the two industries--"the installation work alarm people do is not unlike what telephone installers do"--he maintains that the difference remains in the business attitude.
Currie also speculated that Bell Canada's exit from the security market is partially due to its recent change in ownership and shareholders taking a "long hard look at what the company is doing and its return on investment." Shareholders approved in September 2007 the sale of Bell Canada's parent company, Bell Canada Enterprises, to an investor group led by the Teacher's Private Capital in an all-cash transaction valued at $51.7 billion.