Faced with an uncertain future and many difficult questions, members of the Paging Leadership Association met last month in Florida to determine how the industry should position itself in a game that is moving in an increasing number of new directions.
“The big question is where paging is going to fit in a changing wireless landscape,” said Darryl Sterling, senior analyst at the Yankee Group, whose presentation was a central event at the meeting.
Amidst the breakfast meetings and golf sessions, participants may have pondered that question with about as much anxiety as a soon-to-graduate high school student trying to decide on a college major.
Two things are certain, Sterling said. The future success of the messaging industry rests on carriers’ ability to work together and to innovate. And given the current state of wireless voice, the messaging industry has a window of opportunity to capture a good piece of ground and hold it.
“Wireless voice carriers have no time to create strategies to directly compete with paging,” Sterling said. “They’re focusing their time, money and resources on other issues than developing marketing services to text messaging. They have other priorities.” These include network upgrades, increasing minutes of use and gathering more spectrum. “Their plate is full.”
Paging carriers should use this time away from the competitive limelight to create strategies that directly compete with future voice services, Sterling told the audience.
“They have a window of opportunity to establish market share in non-traditional areas,” said Sterling. These include content services, enterprise access and telemetry.
The importance of proper positioning is evident in the way paging carriers have begun teaming up to bolster their strength in distribution, marketing and content. Examples include the alliances formed recently between Paging Network Inc. and BellSouth Wireless Data L.P., SkyTel Communications Inc. and American Mobile Satellite Corp., and the triad of PageMart Wireless Inc., Metrocall Inc. and AirTouch Paging.
In the realm of content services, Sterling said carriers need to model their delivery modes after the types of Internet portals available today. Internet sites like “My Yahoo!” allow users to customize the content they want to receive.
“That has made it clear that personalized content is important to people,” Sterling said.
Beyond merely extending that content wirelessly, carriers should take the next step of allowing customers to detail how they wish to receive the content-over what device-and then optimize the content for that device.
To best attack the enterprise access market, Sterling said the industry should move in two stages-first by penetrating the revenue earning sectors, then by integrating various cost centers. Once sales personnel and executives discover messaging solutions increase revenue, their value may be better quantified. Further value can be gained by integrating e-mail, e-content and e-commerce, as well as virtual private networks, wireless services and other operational structures via wireless messaging-to the point where wireless connections become the backbone of the overall system and not just an addition.
With forecasted revenue of $10 billion by 2008, telemetry applications are expected to be the torchbearer of this second phase.
“That’s an extremely modest assumption,” Sterling said. “It’s a huge industry. The problem is that it’s also an extremely complicated industry.”
He said carriers would do well to target telemetry applications that best match paging’s strengths.
Sterling defined the appropriate target market for telemetry as anything that doesn’t require an immediate response, like meter reading and vending-machine monitoring.
Sterling even suggested carriers not completely rule out voice messaging, an industry plagued by low subscriber counts to date.
Overall, the Yankee Group estimates 13.9 million people will be advanced messaging users by 2004, guessing that half of all carriers’ customer bases will be advanced messaging subscribers.
