Infonetics: Home automation to boost operators' revenue, customer loyalty

Though the market for home automation services may be still in its infancy, research firm Infonetics believes that these services will create greater customer stickiness for both traditional wireline and cable operators alike.

"The potential customer loyalty and incremental revenue attached to home automation services, particularly home security and home energy management, are too enticing for any operator to pass up," said Jeff Heynen, directing analyst for broadband access and video at Infonetics. "Many broadband operators are starting out small, offering remote control of lighting, doors, thermostats, audio, video, and security systems."

Heynen added: "The goal will then be to layer on additional revenue-generating services, such as a full-fledged home security system."

Over the past two years, major telcos (AT&T (NYSE: T), China Telecom (NYSE: CHA), Frontier (NYSE: FTR) and Verizon (NYSE: VZ)) and cable operators (Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC)) have all made their own respective moves into the home automation segment. Just this week, Comcast announced that it would extend its Xfinity "Home Service" to Denver, for example.

Two factors are driving service providers to roll out home services: increasing average revenue per user (ARPU) and reducing subscriber churn.

Much of the initial and long-term momentum in the home control service segment will continue to be home security, while monitoring of appliances and whole home energy usage will see a growth surge between now and 2013, according to Infonetics.

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