Paging SMS

The lines are blurring within the wireless community. Wireless is becoming a big gray area as the distinction between cellular, PCS and paging diminishes. The issue is becoming less one of cellular vs. PCS vs. paging and more of which carriers can offer the services that customers want at a price they are willing to pay. Finding that mix is not easy. As competition for customers increases, carriers are not staying within their previous neatly defined roles, but are expanding to offer a greater number of services.

Many cellular and PCS carriers also resell paging service both as another revenue stream and to position themselves as a 1-stop shop. And now, as data gradually increases its presence in the marketplace, those same carriers are turning to messaging as well. Once the domain of the pager, messaging is making its way to the handset. Although carriers are quick to say that voice communications is still first and foremost the top priority, they have their eyes on data as an added revenue stream and a means to increase the bottom line. So, are cellular and PCS carriers just dabbling in data, or are they paving the way for a true fight for the data market? Whatever the case, the dynamics of messaging are changing, and to the victors go the spoils.

LONG TIME COMING The long-awaited data revolution has been like a thunderhead looming on the horizon, building but not yet taking the population by storm. Although those in the industry have been waiting for the storm to hit for what seems an abnormally long time, many say the data revolution has been following a normal evolution.

Tom Sayor, PrimeCo executive director of product management, suggested that data is going through a relatively normal diffusion curve that happens with almost any technology. He said that although the Internet might have had a faster diffusion curve, most technologies follow one similar to that of the fax machine, which was available for many years before it became an important part of daily life.

According to Jeff Bartee, VoiceStream brand manager for the business customer segment at Western Wireless, several components have to be available for a technology such as SMS to take off. He said the technology has to be solid, and customers have to follow a learning curve to appreciate and integrate new services into their mix. The customer base for data in the United States is still in the learning curve to understanding SMS tools and how to use them to make them more efficient, he said.

He suggested that part of the reason the data hype began so prematurely was that manufacturers, wanting to be first to market, often talk prior to a new product's being ready in an effort to promote themselves as cutting-edge companies. Hearing what was happening in the European data market also added fuel to the hype in the United States.

Because data is a new focus for PrimeCo, Sayor said the company has not spent much time or money marketing its PrimeCast services. However, the marketing that has been done has resulted in concurrent increases in the take rate.

"This says to me it is just a question of getting the word out," Sayor said. "We're going to focus more marketing attention on (messaging), and I'm looking forward to it really taking off."

ROOM AT THE INN? With cellular and PCS carriers throwing their SMS offerings into the mix, the data market could get saturated quickly. Even if data's ship really has come in, the market may not be large enough for everybody to play successfully. Although it is uncertain how the next several years will pan out, narrowband capability would allow for many data-only applications for people who just need to communicate with text and not voice.

"I'm sure there is some market for that, but cellular has been trying to tap that wireless data market since 1986, and it is still small," said JoAnn Blount, BellSouth DCS director of marketing. Although BellSouth DCS is exploring data, she said the industry still has a long way to go.

"I just don't know how long it would be before you start to see cannibalization, where PCS and cellular would overtake the paging market," Blount said.

Although carriers were reluctant to admit outright that by offering SMS they were posing a threat to narrowband PCS (N-PCS) providers, competition is competition.

"There is no clean answer to what is their competitive space and what is mine," Western Wireless' Bartee said. "They're going to have to find a niche that appeals to businesses." Such a niche might include providing pertinent information at a low cost. He said if they can make a combination that GSM or any of the phone people can't touch for a certain component of businesses, then they will run with it.

"But I think the jury is still out; nobody has shown me a recipe yet," Bartee said.

The differences between the 2-way pager and a handset are obvious. But will there be enough of a market for both?

"I think there is a horse race going on here," said Catarina Wylie, PrimeCo director of corporate communications. She said that paging providers knew they were going to have to come up with specialized niches even before broadband PCS carriers were closer to rolling out 2-way services.

"There is probably room for that, at least in the short term," Wylie said.

There may be room for multiple offerings of SMS, but the satellite failure that occurred last month may make potential users think twice before choosing which messaging route to take.

FINDING THE RECIPE However optimistic carriers may be about their SMS offerings, what data services will appeal to customers is not yet a sure thing. It's important for carriers to find the right service to concentrate on while maintaining high quality with their core business. The most important point to consider is relevance. Bartee said that SMS is simply a vehicle to push information across, not a vehicle in itself.

"The value is in the information that you move back and forth, and the ease with which it is distributed," he said.

He added that for the past 18 months, GSM carriers have been focused on providing high-quality voice service and filling out their coverage areas because voice sells most of the handsets. Western Wireless is looking at other things that can provide additional value to the customer. Many vendors propose services that the carrier can send through its SMS channel.

"We almost consider ourselves the gateway to our customer base," Bartee said. He said the company concentrates on finding relevant, simple-to-use features that appeal to a certain need.

"The biggest challenge right now is finding those recipes," he said.

Bartee said he applies the "so what" rule when somebody makes a presentation. He tries to think from a customer's point of view, "Is there something I can replace this with? Is this superior to what I already have?"

"For the next couple of years voice is still going to be your core quality item, that which you are judged on," Bartee said. "The SMS services that you provide will bring additional value, but you have to be careful not to just throw things out there just because you can."

Whether you're N-PCS, satellite, mobile data, PCS or cellular, you still have to find that winning combination. The battle lines may have been drawn, but they have faded. It is every company for itself.