Letter to the editor

December 2002 News & Events

Sir

Consolidation was a breeding ground for crisis

The Competition Board should have given more serious consideration to the possible outcomes involved before allowing the South African security market to consolidate from a number of independent operators, into what is now effectively only a few large players.

These larger operators are pushing the smaller operators right out of the ballpark - and even putting them out of business - by giving away systems 'free of charge' and pressurising suppliers to sell their products at unfeasible margins. There is little or no training or support attached to these deals.

We are sure this dramatic bulldozing effect by foreign investment would not have been the intention of the Competition Board at the time. Acquisitions within our industry have often been justified by weighing up customer density against manpower requirements in certain areas to provide a return on investment. In financial terms this may be so, but it has also led to deterioration in response times in general.

Enter the vendors who sold out their monitored alarm/armed response companies some time ago. Their non-compete clauses are expiring and many of them are planning to re-enter the market as soon as they can.

They do of course have all the intellectual property needed to set up shop in their respective areas and may indeed win back a meaningful part of their previous clients - these clients will only be too happy to have that good old-fashioned personal service back on their doorsteps again. They are tired of being just a number!

Honeywell-TeqTrader has been monitoring this resurgence and we have aligned ourselves to initiatives which will ensure these vendors start growing into meaningful, quality independent operators all over again - just in time to balance the scales of the security industry back to normality.

Frank Fowles

Honeywell-TeqTrader

011 805 1201

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