AT&T Licenses Digital Life to Telefónica

AT&T Licenses Digital Life to Telefónica

AT&T has announced that Spanish-based telecommunications company Telefónica will begin trials of the U.S. operator’s Digital Life smart-home service in select European markets. According to a report, Telefónica will offer around 750 customers a version of Digital Life for a period of three to six months and then evaluate the results. It did not specify exactly which elements of AT&T’s platform—which encompasses motion sensors, security cameras, thermostats and other home systems controllable via mobile devices as well as PCs—it will be adopting. Pricing was not discussed, either, though the operator said it expects to launch the service commercially sometimes during the first quarter of 2015. Telefónica is the first entity outside the U.S. to license Digital Life.

Tarifica’s Take

AT&T’s Digital Life platform, which is based on the “Internet of Things” concept, was designed to be flexible and customizable to the needs of various markets and types of consumers. While it debuted in the U.S. in April 2013 (it is currently in use in 82 markets there), AT&T clearly has ambitions for the product to have a global presence. A company spokesman stated that Digital Life “was designed for multi-country use, and we see it as a great way for OEMs and developers to extend new services to global markets while reducing churn and attracting new customers.” The fact that Digital Life is an open-ended platform rather than a fixed set of services promises growth potential and the ability to license it to more operator partners in more countries in the future.

Telefónica is said to have considered connected-home products from a number of providers (some of which, such as Google, are not mobile operators) before settling on AT&T’s. We find the fact that both entities are operators to be significant: If the smart-home concept truly takes off in many markets, MNOs have the opportunity to take a significant part of the revenue—not just from the needed connectivity but from the platforms and services themselves. As ARPU from traditional telephony and data decline, the smart home is one of a number of new types of products that operators can offer to stay relevant in the changing marketplace. What remains to be seen is the extent to which customers desire the Internet of Things in the home. One of the most promising prospects is assisted-living services to seniors, who represent a fast-growing demographic with specific needs.