U.S. Cellular: OnLook can compete with AT&T's Digital Life in home automation, security

U.S. Cellular (NYSE:USM) thinks its new OnLook home automation and security platform can effectively compete with AT&T Mobility's (NYSE: T) similar and more established Digital Life unit, according to a U.S. Cellular executive. However, the companies appear to have different ambitions in the market, with U.S. Cellular more focused on delivering a simple experience to its customers and getting a new revenue stream than on creating a platform for other carriers to use.

"I would put it up against [Digital Life] any day," Joe Settimi, U.S. Cellular's vice president of marketing, told FierceWireless. U.S. Cellular is launching OnLook across Iowa and in Tulsa, Okla., to start, whereas AT&T's Digital Life is available in 82 markets across the country. U.S. Cellular plans to expand the OnLook footprint over time but Settimi would not say where or when.

"We have a different goal than they do," Settimi said of AT&T. "We wanted to create a wonderful customer experience," he added, one that is simple and customers can install themselves.

"They created something from the ground up," he said. "As I understand it, they are looking to sell that solution to others and white-label that across the world." Indeed, in September AT&T announced plans to partner with Telefónica for a limited trial of Digital Life in Europe in the first quarter of 2015.

Settimi said that U.S. Cellular spent several years researching how best to move into adjacent wireless markets and home automation and security seemed to be the most obvious one. The push allows U.S. Cellular to leverage the strength of its network in its core service areas as well as its customer service and physical retail locations, he said.

"We have a breadth of network and coverage there," Settimi said of Iowa and Tulsa. "It's why customers have stayed for so long." A home security system that runs on a wireless network needs strong network coverage, he added, and it's something U.S. Cellular thinks its customers will trust the carrier to provide.

Settimi said that the company thinks the new business can be "meaningful" in terms of revenue, though he declined to specify a target. "We definitely think it's a whole new line of business, but one that is certainly complementary to what we offer today," he added.

U.S. Cellular already offers the smartphones and tablets customers can use to control the system, he noted. "From an incremental cost perspective it's pretty efficient for us to get into," he said. The service is also complementary to home phone and broadband service that U.S. Cellular also offers.

The OnLook service is starting in Iowa and Tulsa because U.S. Cellular has established strong market penetration there, Settimi said. That will make it easier for the carrier to launch advertising and raise consumer awareness. AT&T has also launched Digital Life in Tulsa, so that will be a test market for how well OnLook does head-to-head against AT&T's service.

The three OnLook package options include: Essential Security, Advanced Security and Advanced Security + Energy. Each package includes 24/7 professional monitoring and standard components include a control panel, two door or window sensors, a motion sensor, a key fob and security signs and decals.

The Essential Security plan contains those basics and starts at $100 plus a fee of $30 per month. The Advanced Security plan starts at $150 plus a $40 per month fee and adds a carbon monoxide and smoke detector. And the Advanced Security + Energy plan starts at $200 plus a $50 fee per month and adds in a smart thermostat, lamp module and appliance module. Like with AT&T's service, customers can add on additional devices like cameras, which cost more.

Settimi said that U.S. Cellular thinks most customers will start with the Advanced Security plan and then perhaps move up to the + Energy plan, which the company will encourage via promotions. U.S. Cellular may also let customers purchase their connected home devices in monthly installments (a camera that can pan and tilt costs $280 full price, for example).

The OnLook service runs on U.S. Cellular's CDMA network and not its LTE network. Settimi said the service is not going to send large volumes of data and that even video feeds from cameras can be routed over home Wi-Fi networks.

U.S. Cellular is working with Alarm.com on the cloud-based platform, and each package has a gateway from the company, which looks like a wireless router. That device is pre-configured with the cameras and sensors customers purchase so that it is all connected out of the box. The gateway connects all of the pieces of the system and connects to front-end software, which then connects to U.S. Cellular's network.

"We think they have a great offering," he said, noting that U.S. Cellular explored deals with around half a dozen similar security and automations solution providers.

Going forward, the carrier will see how consumers respond to the offering and how much it would have to spend on marketing before deciding to expand. The only real constraint on expanding to an area would be getting licensing from local municipalities to provide security services, Settimi said.

"I would think about this as a platform for the home," he said, adding that it could be expanded to home health care, which might be an even bigger opportunity. AT&T is already moving in that direction with Digital Life.

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