Orange Spain Poised to Enter Home Security Market

Orange Spain Poised to Enter Home Security Market

Orange Spain is teaming up with specialist manufacturer Tyco to launch a home security service with 24-hour monitoring and emergency response for €29.95 (US $32.82) a month plus a €99.00 (US $108.47) one-time installation fee, according to a report. The service, which becomes available on 24 May, can be set up with a smartphone app and comes with sensor-controlled wireless video surveillance equipment that continues working even during a power outage. Only eight percent of Orange customers currently have a security system in their home, the company says, adding that it will be the first unit in the Orange group to launch such a system.

The launch of Orange’s home security service comes nearly two years after Telefónica joined forces with IoT network company Sigfox, insurer Securitas Direct and home alarm provider Verisure to launch a similar service in Spain for Movistar users.

Tarifica’s Take

Home security systems enabled by the internet are increasingly popular across a broad swath of markets, and mobile operators have made various kinds of efforts to profit from the trend.

The most basic, least risky approach is simply to derive revenue from the connectivity needed to run the systems. While this is all upside, there is not a great deal of revenue to earn, because most of the time, security systems do not consume a great deal of data. A more aggressive tactic is to co-brand with existing security systems currently on the market, offer special deals to subscribers that incentivize them to sign up for the service.

Orange Spain is going one step further by taking a “soup-to-nuts” approach and creating its own security system, available exclusively to Orange subscribers. Given that only 8 percent of those subscribers now have a home security system, the field is wide open for Orange, and the pre-existing customer base is relatively easy to pitch to. Buying such a service from an already-trusted provider, for many people, is preferable to initiating a relationship with a new company. The exclusivity is likely to make the offer more palatable, and if the price point is right, we imagine that Orange could do quite well with it. The operator is, of course, late to the game, two years behind competitor Movistar. However, the market may be more mature now than it was then.