For some time, the paging industry has looked to information services as one possible means to increase revenue, but several technological obstacles have restricted the level of customization required for such services to offer real value.
Last week, those obstacles were cleared when 11 paging carriers agreed on a group of broadcast standards that create a common transmission path between content providers and paging networks, as well as a means for carriers to manage customer accounts wirelessly.
The carriers endorsing the standards are AirTouch Paging, Ameritech Cellular and Paging Inc., Arch Communications Group Inc., Metrocall Inc., MobileMedia Communications Inc., PageMart Wireless Inc., Paging Network Inc., SkyTel Communications Inc., Network Services L.L.C., Preferred Networks Inc., and Teletouch Communications Inc. The carriers developed the standards with help from Motorola Inc. and Glenayre Technologies Inc.
According to Wiley Wilkins, director of PageNet’s Advanced Products Department, before these standards existed, content providers had to develop a separate communications interface for each paging carrier in order to broadcast information on their networks. This was because content providers were not familiar with paging networks’ transmission technology, the most prevalent being the Telocator Network Paging Protocol.
Each new relationship required a new development process to set up this connection, Wilkins said, which costs time and money. Reluctance by carriers and content providers to reinvent the wheel with each new agreement has been a major inhibitor of information services.
The set of standards announced last week dictates a common interface between the carriers and the content providers that adopt it, meaning a content provider need only develop one interface to broadcast information on any carrier’s network.
“Now it’s a matter of weeks instead of months,” Wilkins said, referring to the time needed to develop an interface between the two entities.
“What you’re doing is removing the need to speak your language to talk to your subscribers,” explained Iain Gillot of IDC/Link.
Gillot compared the paging standards to those of Internet Web browsers. These standards allow different pagers to read the same content, much like different Internet browsers can read the same Web sites. Content providers still will have to establish relationships with carriers for the right to broadcast information on carriers’ networks, but the standard makes it easy to do, which in turn will entice more content providers to pursue the idea.
“If you grow the whole pie, it’ll be better for everybody,” said Gillot.
Also lacking in the past was a network-based solution giving carriers the ability to program pagers so users receive only the information desired. A pager-based solution would require customers to have their devices reprogrammed each time they requested new types of information.
These new standards allow carriers to simulcast information services to all users, but in a way that customers only will receive the information they requested, updated each time they modify their profile.
Paging carriers say this feature is important because information sent needs to have real value to the customer-not a generic service any customer can get-in order for carriers to charge additional fees for it.
This means two customers of the same paging carrier must be able to dictate exactly what type of information they want down to the smallest detail, so that each may receive completely different information.
Imagine thousands of customers requesting this level of customization to the point where each has a completely different profile. Before last week, a paging carrier would have to send out individual messages to each customer to achieve this. The network capacity issues alone make that next to impossible.
At first glance, the new broadcast standards seem to serve as more of a benefit to content providers than to carriers, but carriers and analysts insist everybody benefits.
“Our customers will now be able to choose many more types of information than they had before,” said Scott Hamilton, SkyTel vice president of investor relations.
However, content providers may continue to sign exclusive relationships with carriers, much like PageNet’s relationship with Cable News Network.
“One of the key parts of the standards is that they allow a carrier to use any business strategy it chooses,” said Hamilton.
An interesting component of the standards announcement is how quickly several paging carriers came together to agree on a set of standards. According to PageNet’s Wilkins, the effort began sometime in July.
“You know how competitive this industry is. For a cooperative effort like this to happen is unprecedented. Nothing like this has happened before in my memory,” said Scott Baradell, PageNet director of corporate communications.
Darryl Sterling, analyst at the Yankee Group, said carriers needed to team up in one way or another to solve a common problem. Since the industry faces plateauing subscriber growth and investor unease, it was necessary carriers join to remove a shared obstacle and create what they hope will be a means of achieving higher average revenue per unit.
“It was important for them to show a united front,” he said. “Since the value to the end user increases, carriers can charge more. (Information services) give a justification for carriers to raise ARPU.”
By teaming on the standards, carriers conceded the need to share a solution and level the technological playing field, he explained. “They can focus on whatever type of differentiation they can offer,” said Sterling. “They don’t have to compete on technology any more, they can compete on services.”
Carriers said they expect new types of information services made possible with the new standard by mid-1999.
