Time for Renewal

The paging industry has endured its share of skepticism. Despite the bad press, paging carriers and vendors are determined to renew themselves. The industry is relying on the evolving Flex architecture to change the negativity in which it is shrouded.

Today, the Flex transport is operating with more than 200 paging providers in 50 countries, serving more than 50 million users worldwide. With the Flex 1-way transport established, carriers are concentrating efforts on rolling out 2-way ReFlex transport on U.S. narrowband PCS (N-PCS) channels.

The advanced Flex transport, ReFlex, is a 2-way interactive protocol that facilitates guaranteed message delivery and peer-to-peer communications, as well as information on demand. ReFlex is designed to offer a variety of advantages to the network and end user including in-building coverage with simulcast broadcast information services and a software application platform.

After more than four years of ReFlex availability (initial 2-way Tango pagers shipped in November 1994), paging providers are finally beginning widespread roll-out in the United States. As of first quarter 1999, SkyTel served more than 450,000 2-way pagers. PageMart and PageNet are completing nationwide network build-outs and plan to begin full commercial 2-way operations by fourth quarter this year. Metrocall, AirTouch (Vodafone) and Arch are expected to resell on the PageMart network in 1999 and begin operations on their own networks next year.

N-PCS interests have banded together in the Personal Communicator Wireless Alliance to ensure paging's advancement continues. The group brings together senior managers from each of the ReFlex carriers as well as two major ReFlex product manufacturers to:

* Expand the market by embedding ReFlex in personal communicators

* Promote new services such as e-chat, filtered e-mail, and push or pull information

* Enable interoperability between networks tied together by the Internet

* Deal with activation issues to simplify the purchase of 2-way pagers

* Deal with marketing, distribution and public relations issues.

Paging carriers now have the opportunity to grow and expand networks. Beginning with large simulcast zones, ReFlex networks can add capacity by frequency stacking high-traffic areas, subdividing zones and reusing frequencies to smaller levels of granularity, as well as targeting and overlaying ReFlex 3.0 for additional capacity. With these innovations, ReFlex networks are capable of expanding capacity by about 30 times before ReFlex 3.0 is needed.

Additional spectrum is being reserved for future N-PCS technology, and more frequencies will be auctioned for U.S. BTAs. There are unpaired 12.5kHz return channels that carriers could marry to existing 25kHz outbound 900MHz paging channels, which refarms the existing 900MHz 1-way paging spectrum for new 2-way paging services. There is significant ReFlex capacity in place, the potential to expand this capacity, and a road for new and refarmed spectrum to support industry growth.

With technology in place, the paging industry is banking on advanced applications to renew itself. In addition to guaranteed message delivery, filtered e-mail and information services, the ReFlex protocol offers third-party programmability. With a megabit of onboard flash memory dedicated to applications, the industry expects advanced pagers will become communications-centric tools.

SERVICE OFFERINGSThere already are 600 developers working on software, and the first applications are coming to market. Some of today's applications include Virtual Client filtered e-mail; the Productivity Software Suite, which integrates a calendar, notepad, to-do list and programmable alerts; Corsoft's Aileron Microsoft Exchange Server solution, which enables contact, schedule, task and notes; Stock Boss, which downloads and graphs performance on a portfolio of up to 20 stocks; and WolfeTech's Pocket Genie, which allows you to retrieve Internet information regarding restaurants, movies, White and Yellow Pages and driving directions.

As more applications become available, 2-way pagers will be positioned to interact with more than 100 million Internet users in more than 100 countries from almost anywhere in the United States. Although they are not Web-surfing devices, interactive pagers could be used to conduct collaborative virtual work or virtual play in near real-time; communicate between work and family groups via virtual e-chat; develop a custom news-tracking model that would sweep the Internet for favorite business news; or selectively download topics using filtering software. Users could access social-group content such as golf-league scores or PTA notes; post or download an affinity-group bulletin board; or download information from special-interest or social Web sites.

The interactive pager could become a wireless wallet to pay bills, download digital money for reusable smart cards, interrogate bank balances, check credit-card balances remotely, or order products and services via e-commerce.

As higher transmission speeds emerge via ReFlex 3.0, wireless image applications could include security identification, real-estate listings or digital X-rays.

MARKETING FOR SUCCESSThe ReFlex network is set to deploy these advanced messaging applications, but who will use them? Some skeptics claim the technology is a reality, but there is no market to support deployment. The paging industry admits there is not yet true market data about who will use these advanced messaging applications.

However, paging vendors and carriers are convinced there is an opportunity, with marketing as the key to success. Today's challenge is for carriers to find the most effective distribution channels to identify how they will market advanced applications. Will services be programmed off the Web, through an e-commerce sale, as a plug in at point of purchase or in an aftermarket sale from a carrier?

Although the industry still is struggling with these questions, carriers have set deployment plans and are addressing marketing issues, which has given the paging industry the confidence that it truly can reinvent itself.

Frost & Sullivan has a bullish take on how narrowband PCS (N-PCS) will affect the messaging industry. Within the paging industry, 2-way messaging has become the new standard by which carriers are measured. End users are accustomed to receive-and-respond capabilities, particularly with cellular/PCS phones, and they expect their paging services to have the same capabilities. Although only a handful of carriers have built or will build nationwide 2-way networks, 2-way will overtake 1-way and dominate the paging industry.

Frost & Sullivan's subscriber model for 2-way messaging in the United States projects more than 3 million 2-way subscribers by year-end 2000. Revenue projections suggest approximately $990 million by the end of the same year, up 115% over 1999. (These numbers do not include telemetry applications.)

However, the enthusiasm should be tempered by the fact that other carriers such as digital cellular, PCS and E-SMR/iDEN also are offering, or soon will offer, 2-way messaging. Most people will opt for a service that combines voice with messaging, particularly if the pricing is lower than 2-way messaging. This could leave many networks in search of users. The saving grace for 2-way paging will be telemetry or machine-to-machine applications, since the voice component is meaningless to machines. Frost & Sullivan projects telemetry revenues will reach more than $440 million by year-end 2000. If the entire messaging industry shifts to non-traditional end users, 2-way clearly can be the rising star of the industry.

NETWORK ADVANTAGES: * Efficient alpha paging with localization and reuse

* In-building coverage with simulcast, broadcast information services (1 to n receivers)

* Pay-as-you-go growth

* Opportunities to expand

* Auto registration and traffic routing

* Message breakup and recomposition

* Multiple-frequency operation, scanning

* Low-cost deployment

* Protocol mixing

* Interoperability potential

END-USER ADVANTAGES: * 2-way, interactive communications

* On-demand pull information

* High call completion

* Guaranteed message delivery

* Message waiting

* E-chat, filtered e-mail

* Software application platform

* Virtual work and play

* Roaming

* Battery life

* Limited location