Despite increasing competition expected from wireless phone services, the Chinese paging market
will continue to grow at a rate of 17.7 percent during the next five years, according to a new study released by The
Yankee Group.
Darryl Sterling, senior analyst of the Yankee Group’s wireless/mobile research division and the
study’s author, defined three reasons why paging will continue to grow despite cellular’s influence-unique cultural
factors, paging chipset licensing and two-way messaging.
“Our research shows that cannibalization has
occurred in certain Asian wireless markets when wireless phone service penetration reaches levels of between 15
percent and 20 percent,” he said. “With the introduction of low-cost digital wireless phone services, paging
is now facing competition from short messaging services available over wireless phones. SMS competition has eroded
Asia’s base of paging subscribers, and is one of the reasons why paging services never took off in Europe, where
[Global System for Mobile communications] digital phone technology has been a regional standard.”
Sterling
also pointed to an impending calling-party-pays tariff system as a potential threat.
Despite these pressures, China
has several unique characteristics that may positively influence the paging market. First, the report details the rather
unique “script culture” of the region. The Chinese speak many different languages and dialects, but use one
common writing system understood by all. “This ‘script culture,’ combined with its population, differentiates
China from other paging markets, and exacts a new premium on the value of messaging,” the report
reads.
However, transmitting Chinese kanji characters requires greater throughput, which must be taken into
account when planning network capacity.
Another factor listed is the effort to license paging chipset solutions to
consumer product manufacturers in an attempt to integrate paging technology into various handheld or portable
computing devices.
“If advanced two-way paging architecture is introduced into the market and these chipsets
can be retrofitted on consumer devices, paging services will not only have a broadened consumer reach, but also will
create an environment for device-to-device communications. This is where the real value of messaging lies,”
Sterling said.
Finally, he said two-way wireless messaging will compete with voice service on a value basis, not
price, as SMS services have no Chinese character input method via a phone keypad.
However, while China has
chosen Motorola Inc.’s FLEX as its standard paging protocol, it has not yet introduced a ReFLEX architecture.
