As a valued customer I received a notice of a rate increase of $3.79 per month. This will increase earnings.
$3.79 per customer x the number of customers that received the same notice II did. you do the math.
We are bullish on the ADT as a stock and the entire security providers marketplace. The reason why, is that there are considerable property insurance savings, upwards of 20%, that encourage customers to have protection for burglary, and now in some states, newer mandates for having protection for fire as well. Together with the newer/emerging industries such as; video, home automation, interactive apps which are getting consolidated into the security systems of tomorrow, there are new areas to increase the recurring revenue. ADT will see $50 a share at some point this year.
You really have to ask yourself why would Comcast, AT&T, Stanley and others enter this domain if it wasn't an attractive industry?
Keep in mind, there is competition from companies like GeoArm (no price increases) whom takes over ADT security systems for as low as $8 a month, that will certainly take a piece of this ever growing pie.
What if the customers decide to ditch ADT because of the price increase? There are too many other options available now for ADT to raise prices. They should reduce prices to try to keep customers with all the competition looming from the cable providers and others getting into the residential security market
The rate hike received may not be nationwide as I did not receive a rate increase. In addition this company is the biggest and the best. Are you likely to dump them and start over to save a few bucks? Starting over also costs..
You do not ditch protection systems as simply as switching a phone. Most customers are under contract. Then, if they decide on another provider it will cost them up front. Besides that, ADT will have at least one good quarter of more $$$$$$$.