Total paging subscribers in the United States will reach 68.9 million by year-end 2002, according to The Strategis Group report “The State of the U.S. Paging Industry: 1998.”
Of that number, 60.5 million are expected to be one-way subscribers and 8.4 million advanced messaging and narrowband Personal Communications Services (NPCS) customers. The latter figure was further broken down to 55 percent being guaranteed messaging alphanumeric users and the remainder split between full two-way and voice messaging subscribers.
Looking backward, the report showed subscriber growth in the paging market grew to 48.1 million customers last year, increasing paging penetration by 2 percent to 18 percent. However, while subscriber growth rates are as strong as 15 percent, growth rates have fallen in the last three years, according to the report. Growth rates were as strong as 22 percent in the 1996 Strategis study. The Strategis Group determined the lower growth rates stem from the industry’s strategic focus transition last year from subscriber growth to financial strength.
Although growth rates slowed in general, The Strategis Group said it expects an increase in high-revenue applications with NPCS offerings like voice messaging, guaranteed messaging and two-way text messaging gaining in popularity. These NPCS services should raise paging revenues 5 percent or more this year, from the average revenue per paging subscriber figure of US$9.58 reported in 1997, which was 2 percent lower than the US$9.79 reported in 1996.
“We see revenue per subscriber bottoming out in 1997 and most carriers looking toward increased ARPU in 1998,” said Steve Virostek, Strategis Group analyst and author of the report. “It’s a trend that almost has to occur.”
The growth in higher-revenue alphanumeric services outpaced the growth of all other pagers. By year-end 1997, alphanumeric pagers made up more than 15 percent of the total paging units in service, an increase of 42 percent over 1996. The Strategis Group expects such abilities as information services, e-mail forwarding, text input and various Internet capabilities to push up this percentage further this year.
As alphanumeric services bring in more than 85 percent more revenue per month than plain numeric service, generating new alphanumeric customers will add to carriers’ rising revenue growth while cutting down on their customer acquisition costs, the group said.
However, Virostek said traditional one-way alphanumeric paging will begin to decline after this year, as guaranteed messaging alphanumeric replaces it, further supporting the view that NPCS and advanced messaging services are expected to be the primary growth drivers of the paging industry.
