Now is the Time to Sell Customers on Digital Alarm Radio Transition
â€œItâ€™s just a matter of marketing and selling and getting out in front of it and positioning it in a world where networks are changing ever so frequently; itâ€™s basic marketing and salesmanship that has to be deployed there,â€ advised Gordon Hope, vice president of marketing, business development, Honeywell Security and Custom Electronics, Syosset, N.Y.
The Federal Communications Commission (FCC) has set Feb. 18, 2008, for ending the requirement that cellular telephone carriers provide analog mobile phone service (AMPS). These carriers have been converting their networks to digital for years and will be allowed after that sunset date to use the frequencies previously occupied for AMPS transmissions for digital cell phones.
Alarm customers whose systems use the AMPS network will need to have those systems converted to digital transmission, although other alternatives are being explored by the Alarm Industry Communications Committee (AICC).
Among these are convincing the cellular telephone industry and/or the FCC to extend the deadline and developing new digital equipment to replace the AMPS system.
Others using the system include the OnStar automobile communication system, services for the hearing-impaired, some governmental departments and public utilities. However, OnStar has announced it will convert to digital by the sunset date.
The FCC will comment in February 2006 and February 2007 on how the AMPS phase-out would affect hearing-impaired customers. It already has rejected a public safety argument advanced by OnStar to delay the transition.
One strategy being advanced by the AICC is to use an FCC extension of the sunset date to obtain less onerous financial terms from the cellular carriers to continue the AMPS service for a period.
â€œItâ€™s certainly painful, especially for the smaller companies,â€ said Lou Fiore, AICC chairman. â€œThis requirement is for installation of new equipment, and whether or not the customer will cooperate with the transition is up in the air.â€
Fiore is awaiting additional information from the FCC about whether a delay of the sunset date is possible.
â€œIf digital equipment was available for years, that would have been a different story, but this is all happening in a compressed time frame,â€ he declared. Many of the digital radios required for the transition are not yet on the market. Is two years long enough for such a transition?
â€œOur accounts that install it say â€˜no,â€™ and they have the labor pool and an installed base,â€ emphasized Hope of Honeywell. â€œItâ€™s challenging to do it whenever you do it. There is an installation bottleneck, and when are you going to get to them?â€
He estimates Honeywellâ€™s digital radio products for AlarmNet-C, which uses the AMPS network, will be out for testing during the first quarter of 2006 and available in higher quantities by the second quarter of 2006.
One advantage for dealers of the new product is that unlike other cellular products, it will allow for two-way communication as phone-line products do. So not only will the digital devices be able to send out alarms, they also will be able to download information sent to them.
â€œWeâ€™re going to be offering them a GSM solution shortly, and when they install that, theyâ€™ll have to buy another radio and do a service call, but once theyâ€™ve made that service call, they have an independent means of getting at that panel, and it wonâ€™t impact the ability of the alarm company to reach that panel,â€ Hope promised about dealers. â€œThatâ€™s a significant and important feature that consumers may not care about, but it has operational impact on dealer companies.â€
Simply because cellular carriers will be allowed by the FCC to stop transmitting the AMPS network after Feb. 18, 2008, does not mean that all of them necessarily will do so immediately, maintained Scott McPherson, director of marketing for Telguard Security Products, Lithia Springs, Ga.
â€œWhen I say they will turn off like a light switch in congested urban areas where theyâ€™re spectrum-challenged, in the square states, analog can stay operational for decades,â€ he asserted. The advantage to keeping AMPS in sparsely populated rural areas is that the FCC allows analog cellular radios to operate at higher power, which can provide greater coverage.
Telguard has a UL-approved digital cellular alarm communicator available now. One solution the AICC recommends on the assumption that the AMPS network will be phased out eventually if not in February 2008 is that security dealers and systems integrators stop installing AMPS systems now. â€œThe economic differences between analog and digital are huge for a carrier,â€ emphasized McPherson. â€œFor every frequency theyâ€™re using to support one analog voice customer, they can get eight to 10 digital customers on the same frequency.
â€œGiven that carriers spent billions for that spectrum, if they can get eight to 10 new customers on the same piece of real estate theyâ€™ve already purchased, that translates into huge economics for them,â€ he pointed out. â€œThis is a big train thatâ€™s coming, and thereâ€™s nothing thatâ€™s going to stop it. The economics for it are absolutely overwhelming.â€