After months of aggressive buildout-beginning in late June with the Texas launch-PageMart Wireless Inc. announced its two-way, ReFLEX 25-based narrowband personal communications services network is available nationwide.
The $310 million, Internet Protocol network upgrade adds two-way messaging capabilities to its existing FLEX network and, with the exception of some residual buildout yet needed in a few small cities and rural markets, has the “exact same footprint as our one-way network,” said PageMart President Ross Buckenham.
The first services offered on the new network include the Scout Guaranteed Messaging service, available in both local and nationwide plans, as well as single number service and Nationwide TODAY, which allows local coverage subscribers to change to nationwide coverage when needed. Pricing for guaranteed messaging service is $10 a month for local coverage and $20 a month for nationwide coverage.
Anyone with e-mail or other means of Internet access also can send messages to Scout subscribers by addressing the correspondence to the subscriber’s phone number followed by guaranteed.pagemart.net. The company said it expects to add canned message response, known as 1.7-way paging, and full two-way paging sometime next year.
During the market-to-market rollout, PageMart offered the Scout service locally, but reported few subscriber additions. John Beletic, PageMart chairman and chief executive officer, explained this year’s goal was network building, not subscriber additions, but expects advanced messaging sales to ramp up throughout 1999.
“The focus this year is very much on construction,” he said earlier this summer. “Next year will be focused on selling.”
Buckenham said the sales and marketing mission mostly will target corporate accounts.
“Advanced messaging is primarily a business tool. A mission critical guaranteed messaging tool demanded by small, medium and large companies,” he said.
PageMart has put together a national accounts sales team to sell to Fortune 1,000 companies, while its traditional sales force will aim at smaller companies. Also, Buckenham said he expects PageMart’s high-end retail channels to include the more expensive device and service. Finally, he said the marketing agreement with Metrocall will move a few units, and that he expects to see other such resale relationships made over time.
Buckenham said he does not foresee much migration of current one-way subscribers to advanced messaging services.
“There will inevitably be some migration, especially from the high-end users … but I don’t see a lot of cannibalization going on in our business,” he said.
Just prior to the network announcement, PageMart revealed it “expects to experience a decrease in the number of units in service during the fourth quarter 1998 ranging from 100,000 to 150,000,” according to a prepared release.
With such large reductions expected in its one-way subscriber base, PageMart is banking on this new network to carry it into the next century.
“This is the future of our industry,” Buckenham said. “We have a vision that NPCS and ReFLEX 25 will become the worldwide standard for embedding short messaging into personal communicating devices. We envision a day when everybody has a personal communicator in their pocket or wallet that is powered by ReFLEX.”
However, analysts at J.P. Morgan dropped PageMart’s rating from Buy to Market Performer, a slight downgrade, and also revised its year-end 1999 target price to $10, from $12, citing expectations the company would experience sales delays on the new NPCS network.
Buckenham, for one, does not share these concerns.
“Over the next year or two, we feel very bullish about this,” he said. “Analysts are projecting a three-quarters to a full million of advanced messaging subscribers for next year. The market will be so big next year, we don’t really see or want to create a competitive situation … SkyTel obviously has a big head start, but we think we’ll snatch up an initial share.”
The only hindrance Buckenham made reference to is the price of the device, which still costs more than $200.
“The biggest challenge our industry has is the price of advanced messaging devices are still high,” he said, adding his desire to see prices fall below $150. “That’ll really drive the size of this market,” he said.
Looking beyond subscriber numbers, PageMart also has positioned the new network as the “final Internet mile” to wireless messaging devices, to include “every human, car and machine,” in Beletic’s words.
PageMart recently created the Telemetry Services unit to secure machine-to-machine applications and agreements using the new network. To date, the unit has made public several agreements with such partners as Interactive Technologies Inc. and Monitel Products Corp.
However, the Telemetry Service unit is not expected to really take off until next year. First, PageMart doesn’t plan to offer full two-way capabilities on the network until mid-1999. Also, PageMart is waiting for smaller and cheaper two-way modems from Motorola Inc. and Glenayre Technologies Inc. needed to extend two-way data communication to various appliances.
“Next year is going to be the year of guaranteed messaging, and then in 2000 we’ll see interesting telemetry applications,” Buckenham said.
