Traditionally, security alarm systems used fixed telephone lines to pass information from the security alarm panel to a central monitoring facility. Today, however, that communication is increasingly being delegated to a digital cellular link. ABI Research forecasts that the 2007 number of just fewer than 2.5 million wireless security alarm connections will increase to more than 7.5 million in 2013.

What is driving this transition? According to senior analyst Sam Lucero, a number of factors have combined to create this new market trend: “In North America, formerly analog wireless security alarms are now shifting to digital cellular services as a result of the AMPS ‘sunset’ in February 2008. More importantly, the continuing decline of landline voice services and the increasing utilization of second phone lines for DSL broadband services have made cellular connectivity more attractive, even necessary, for security alarm connectivity.”

Other factors promoting cellular security backhaul include the general trend for cost-optimized alarm systems to rely on wireless connectivity exclusively, particularly in Europe. In addition, wireless operators and broadband service providers are increasingly entering the security alarm service industry and are utilizing wireless either as a primary connection or back-up connection to a primary broadband connection. Also, unlike wired connections, cellular connections cannot be cut, and current cellular module technology includes anti-jamming features.

Lucero does caution that there are challenges to the adoption of wireless technology by the security alarm industry. “Wireless is a relatively new option and many security alarm dealers have to be trained in the installation process,” he says. “In addition, the relatively high cost of modules, particularly CDMA modules, is an inhibitor. Despite these barriers, however, there is an opportunity here for most if not all cellular module vendors, as well as for carriers and specialist M2M providers.”

AT&T appears to have positioned itself as a key player in the North American market, as has M2M mobile operators Aeris, Jasper Wireless, and Numerex. M2M mobile virtual network operator KORE Telematics is also strongly positioned in this market.