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Comments on RMR valuation radio v phone from March 18 2014 article

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Ken

I was beaten to the punch but here are some tidbits from my corner.

A radio account that supports remote Upload/Download allows the dealer to make changes to the account, update codes (for a fee) and delete users on demand. (With proper authorized notice from an authorized person of course.) from a computer in the office or out.

When the customer decides to drop wireline phone service without warning and use just cell phone we lose connectivity When the managed VOIP facility changes parameters so that a working system no longer works with the alarm and no changes were made on premises. (Done in the name of modernizing the network). This has been reported by several dealers this year.

I would rather have all my accounts on radio rather than depend on the state of wireline communications.

FYI Frontier communications purchased all of the POTS LINES in Connecticut from AT&T. (Seems AT&T only wants the wireless and voip business.)

From my corner of the room

Joel Kent

FBN

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Ken,

I generally disagree more with Steve Rubin’s analysis on how to value a RMR contract than agree with him.

$25.00 net dollars is $25.00 net dollars. The issue of a 2G radio still in service is a valid basis for downward pressure on the value because the alarm company has the burden to upgrade the customer because of an obsoleted technology is being used that the alarm company originally installed. I don’t accept his reasoning that a 4G because of “less chance of a cancellation”. The fact that phone lines are going away at an increasing rate is true but the VoIP carriers are much more accommodating to the digital dialer than against it. Panel manufacturers are including IP transmitters which don’t require cell based service, IP may not be better than Cell technology but it is cheaper, able to deliver many more times data and chargeable services with little to no increased cost and provides better margins to the alarm company at the retail level transaction.

Steve’s mistake is that he is not looking at dollars as dollars or considering the value of money as money. If he went to a bank or other non alarm industry financial institution where the rest of the world operates they don’t know or care to ask about 2G, 4G or phone line displacement. $25.00 dollars in revenue is worth just that in the equation and its fair to both the buyer and the seller. I would suspect that if Steve was representing the buyer I would assume that he would be using my approach that 2G is a downward pressure on the value of $25.00 as I have discussed and that 4G is not significant to raise the offer with all other issues being equal.

Bart A. Didden, President

U.S.A. Central Station Alarm Corp.

Port Chester, NY

Milford, CT

St. Paul, MN

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Question - condo fire alarm - residential or commercial contract

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Ken,

First off, this newsletter is a great resource, I'm a long time reader, first time inquirer.

If we are going to be monitoring a fire alarm in a building with condos, and the subscriber is the condo association, should we be having the commercial or residential fire contract signed? The fire alarm and devices are only in the common areas.

Thanks in advance,

Nick

Northstar Services, Inc.

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Answer

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I would recommend the Commercial Fire All in One. Though that contract covers more than just monitoring, you might be surprised that the subscriber recognizes that it needs inspection and service, in addition to the monitoring. If you are only going to contract for monitoring then you would use only the Monitoring portion of the Fire All in One. That contract will be clear that the fire alarm system is compliant, to code and approved by the AHJ. If it's not then don't agree to monitor the fire alarm. Your central station should also be smart enough to decline monitoring if you haven't confirmed that the fire alarm system has been approved.

There is no fire alarm agreement for residential because the fire alarm devices are typically installed together with an intrusion system; the Residential All in One will cover all security systems and the fire alarm devices too,

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Comments On RMR Valuation Radio v Phone / Condo Fire Alarm - Residential Or Commercial Contract - March 26, 2014