By Alina Selyukh
(StartName) – AT&T Inc <T.N> on Monday said Spain’s Telefonica SA <TEF.MC> will license its home security technology for limited trials in Europe as the U.S. carrier hopes it has found a new way to profit from its nascent connected-home business.
Telefonica will offer European customers a version of Digital Life, AT&T’s home monitoring and automation system, for three to six months before evaluating results of the trial, said Steven Bartholomew, a Telefonica spokesman.
AT&T, which released the Digital Life platform in the United States in spring 2013, is in talks with numerous other potential global partners about similar licensing agreements, said AT&T Mobility CEO Glenn Lurie.
“We spent a lot of money building the platform … This is just another way to take those same assets and monetize them, and not just in the U.S., but globally,” Lurie said in an interview.
“International (licensing) we think is one of the largest revenue opportunities on top of the core business in the U.S.,” he said, adding that the company is also looking to expand its connectivity system to small businesses and healthcare.
AT&T’s Digital Life service allows consumers to connect to the Internet various home appliances and processes – such as lights, thermostats, smoke detectors, security cameras or locks – so they can be monitored or controlled remotely.
AT&T has said it expected to eventually grow Digital Life into a $1 billion annual revenue stream, but the company has not disclosed the profitability of the platform so far.
Lurie said AT&T could license Digital Life to foreign partners either in parts, such as software only, or in its entirety.
Neither company’s representative elaborated on the specific content of their particular licensing agreement or the terms of the licensing, which are individually negotiated and rarely disclosed. Typically such deals involve up-front and per-customer payments, among other fees.
“We are not able to fully disclose how much of the platform we are going to use,” Telefonica’s Bartholomew said in an email. But he highlighted some of the core elements, such as the digital user experience and the remote management system, as expected to provide consumers “with a unique and strong user experience.”
Bartholomew said the Telefonica-branded service will be a version of AT&T’s product adapted to the European market. He also said it was too soon to comment on where exactly the trials will take place.
Telefonica had approached AT&T about licensing its Digital Life platform after the U.S. wireless carrier showcased it at Mobile World Congress, the international consumer electronics show, Lurie said.
“We’ve looked at platforms from a large number of vendors – we believe the AT&T Digital Life platform to be best in class,” said Bartholomew. “It has been successfully proven in the U.S. and will accelerate our time to market in this new product category.”
(Reporting by Alina Selyukh, editing by G Crosse)