AT&T Ponders Sale Of Home Security Business

AT&T Ponders Sale Of Home Security Business

Telecommunications giant AT&T may sell its Digital Life home security business, as it looks to alleviate its debt following the planned $85.4 billion acquisition of Time Warner, according to a report from Reuters on Friday.

Founded in 2013, Digital Life provides home security & automation services for homes, apartments and small businesses across the United States. It serves up to 500,000 customers and could be sold for up to $1 billion. However, this will do little to reduce the company's debt, which totaled $143.7 billion at the end of June.

The Time Warner acquisition is currently under antitrust review by the U.S. Department of Justice. But the deal is expected to close by the end of 2017.  

Digital Life reaches 80 U.S. markets, including large cities such as Chicago and New York, but struggles to compete with market rivals like Comcast. Comcast launched its own Xfinity Home service in 2012, which includes 24/7 professional monitoring and the ability to arm, disarm and control your system remotely.

For cable companies like Comcast and AT&T, home security services has become another revenue stream to rebuild margins affected by the declining video subscriber numbers in recent years. According to the ‘World Home Security Solutions Market’ report:

“Increasing incidence of crime rates and increasing rate of burglary are the factors that necessitate the home security solutions. Design of efficient and sophisticated security systems along with user-friendly installation features enabled by wireless technology are the key factors that are expected to boost the market growth. Furthermore, availability of remote monitoring with the aid of mobile devices along with beneficial insurance policies are also expected to fuel the growth of the home security solutions market.”

Last month, AT&T sold home security company LifeShield  to private equity firm Hawk Capital Partners for an undisclosed fee.

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