Want Paging With That?

If you are like most carriers, you have turned to bundling services. However, these all-in-one solutions raise a compelling question for paging companies. Is it possible for a company offering a single service to survive? Sure, said Mark Judge, Conxus Communications senior vice president of marketing and business development.

"Technologists miss the boat trying to come up with one device to do everything, to be the end-all product," he said. "People want one thing done well."

INTERNETWORTHYMost of today's top paging companies believe that cellular and PCS present little or no threat of encroaching upon their customer bases. Their "secret weapon" is the Internet.

"The Internet has set the stage for us to communicate electronically," said John Beletic, PageMart Wireless chairman & CEO. "We view our service as a mobile wireless extension of the Internet, with the ability to respond back to a message."

According to Scott Baradell, PageNet director of corporate communications, the Internet, along with the newest data-based technology, allows his company to offer more sophisticated services to its customers as they become more sophisticated about emerging applications. In the past, he said, 90% of pagers were numeric, so the only way a carrier could stand out was through coverage.

Today, value-added services are what differentiate competitors. He added that software innovations -- such as wireless integration with remote monitoring equipment or custom programming to keep headquarters in touch with a business' sales force -- are ways of taking advantage of extending information from the Internet and intranet for the corporate database.

"Information is the key," Baradell said.

For its part, PageMart has deployed its advanced messaging network. It also has developed and implemented AXIS, a Windows NT platform that provides custom services to its users with unique applications and special interfaces focused on solutions for corporate customers.

Yesterday's "paging companies" are tomorrow's "messaging networks." They reflect long-range planning and a sizable investment.

"Our nationwide 1-way paging network at PageMart was a $90 million infrastructure," Beletic said. "Conversion of that network to an Internet protocol, 2-way network, costs an additional $310 million. That's an order of magnitude jump in expenditures in order to provide much more robust services and positioning PageMart as an extension of the Internet for messaging."

NUMBERS TALKThis confidence in messaging is backed up by data. For example, more than 35 million messages were sent to PageNet customers through the Internet last year, according to Baradell. With 10 million subscribers in the United States, Canada and Spain, PageNet reported a 1998 net revenue of $968.4 million, and it serves more than one in every five wireless messaging customers in the United States.

PageMart's subscriber base increased dramatically over the last five years and continues to flourish with a reported revenue of $312 million for 1998. The 40 to 45 million pager users in the United States are prime candidates for advanced messaging.

Information services are an integral part of the advanced messaging offering. Whether providing general broadcast information that is available to anyone, custom information that the user configures specifically, or information on demand that is responding to a single inquiry, information services via the Internet is a strong combatant in the competition for the wireless consumer's dollar.

"For our higher-end services, competition comes from all wireless providers," confirmed Baradell. "We are trying to offer customer options they can't get anywhere else through their data-based technology."

Other than enhanced services, Baradell said that wireless messaging's service quality is another reason paging companies will continue to prosper.

"There is no question that PCS users have been disappointed with the short-messaging service of PCS compared to that of paging," he explained. "It's not accurate to say that paging on those phones is even close to the quality, reliability and footprint of a pager. Although it may be adequate for a few users, it's just not comparable."

Today's technology further encourages customers to use messaging services by assuring callers that their messages are being received. All major carriers now promote guaranteed messaging, referring to the network's ability to validate message receipt back to the transmitting unit.

THE POWER OF VOICEAnother messaging option, voice messaging, meets with mixed acceptance in the paging industry. Baradell described the voice messaging service introduced by PageNet in early 1997 as "a product that just didn't make it." Tested in Atlanta, Dallas, Sacramento, CA, and later in Chicago, the service did not generate a great deal of enthusiasm.

"Although we've not given up on it completely," he said, "we're just not sure that offering voice-messaging services over paging and messaging networks is the smartest use of the messaging bandwidth at this point."

Other industry experts believe, however, that voice messaging does have a niche and may be able to provide a viable business model. Unlike its fellow paging companies that have evolved from 1-way paging into 2-way messaging, Conxus was created solely to be a 2-way provider. Although Conxus did not have a full selling year in all markets in 1998, it went from zero to 85,000 subscribers in what basically was a year's time, even while markets were being opened.

Predominantly a voice-messaging company, Conxus sees the next thrust in 1999 as voice-mail integration, in which a paging unit becomes a wireless extension to voice mail.

"There are very large markets, not only in small and mid-size businesses where the company owns its own voice-mail system, but in network-based voice-mail platforms served by RBOCs and residential services, as well," Judge said.

Referring to an old saying that "if all you have is a hammer, you view everything as a nail," he explained that "data-centric people see the whole world revolving around text (or data) delivery." Yet, he said, people throughout the wireless marketplace want voice.

"We have been a bit surprised by the degree to which growth in voice messaging is occurring both in business and in personal use," Judge said. "Early speculation was that voice was overwhelmingly a consumer product. This has not proved so."

He said that actual voice messaging -- a message sent in the caller's own voice and language -- is not an expensive service. More voice mail and answering machines are in use than wireless phones. A voice-messaging service can compete with all of these and complement voice mail and answering machines as well, he said.

"We don't feel that our messaging is in strict competition with other services, including cellular," Judge said. "It's not a matter of consumers and businesses making a choice of one or the other. Most of our users also are cellular users who use our service to manage their contacts, serve as their voice mail and control phone expenses."

According to Judge, 70% to 80% of all phone conversations are one way, with one person relaying information and the other party simply acknowledging with a monosyllabic response from time to time. With guaranteed voice messaging, the person receiving the message can enjoy not only what Judge calls "the warmth and depth of voice communication," but can derive the degree of urgency and emotional content from the voice tone and inflection.

NO LANGUAGE BARRIERThe fact that messages can be entered in any language also is a benefit. Such a device "gets people away from the necessity of booting up a PC in order to leave a message," Judge said. Although the future of voice messaging throughout the wireless industry remains to be seen, Conxus reports that its voice service is selling remarkably well, faster than text did originally.

From beeps and numeric to alphanumeric to 2-way paging and voice messaging, paginghas managed to stay competitive in the wireless market. Most carriers market to one degree or another through resellers. For example, PageNet resells its paging service to Sprint as well as other smaller carriers. Resellers may, in turn, market the pager as part of a bundled service. However, according to carriers, this is not typically the case. Generally, messaging services tend to stand alone, providing a communications tool that -- through prescient migration strategies and keen marketing -- refuses to become obsolete. From now on, the medium is the message.