Editor’s Note: RCR Wireless News goes all in for “Throwback Thursdays,” tapping into our archives to resuscitate the top headlines from the past. Fire up the time machine, put on those sepia-tinted shades, set the date for #TBT and enjoy the memories!
Finding mobile’s marketing identity
What does wireless have in common with toothpaste? Maybe not much now, but perhaps the toothpaste industry has learned a marketing secret that wireless carriers could benefit from. Toothpaste companies have learned to pick a customer segment they want and market their brand to that customer, said Mike Crawford, president of M/C/C, a Dallas-based marketing communications firm specializing in the high-tech industry. Crest, he said, has positioned itself as the cavity fighting toothpaste and is marketing its products to parents; the `Aim tastes better’ idea is designed to attract consumers that don’t like toothpaste; Close Up is targeted at young couples with its fresh breath focus; and UltraBrite targets smokers and coffee drinkers by promising whiter teeth. “Each brand owns an attribute,” said Crawford. “The trick is to figure out what you want to own.” Most carriers, he said, haven’t figured that out yet. They either are chasing the same group of customers–mainly high-value business or affluent customers–or they are casting their net too wide and trying to catch everybody. “They each can’t get 18 percent of the market spending $60 or more a month,” said Hunt Eggleston, president of Technology Trends and Focus Inc. “There just aren’t enough people out there.” The mission of carriers has been growth at all costs, said William Brunette, director of market development at Matrixx Marketing Inc., a provider of outsourced customer care services. “The industry has measured success in terms of subscriber numbers and subscriber additions, and analysts have measured the health of companies by those numbers,” he said. “Those days are coming to an end.” … Read more
Metrocall introduces Pager ID
ALEXANDRIA, Va.-Metrocall Inc. announced the nationwide rollout of its new Pager ID service, which identifies the name of the person placing the call to the pager, as well as a return telephone number for the paged party to call. The call back can go to any telephone, not just the paging party’s home phone, said Metrocall. Metrocall plans to roll out the new service region by region beginning in mid-April. It will be available as a alphanumeric enhancement on Metrocall’s nationwide service. … Read more
Paging looks for a path forward
NEW YORK-“The challenge for the paging industry is to reinvent itself so it can become a free cash-flow business, to put the brakes on capital expenditures and drive up revenues while unit growth is declining,” said Brian G. Coleman, a director of Toronto Dominion Securities USA Inc., New York. The stampede that started in the mid-1990s to paging resellers as a means to boost customer numbers has led to unrealistic inflation in growth expectations. This resulted in an expensive network expansion boom that couldn’t be paid for out of new customer additions because of high churn rates and low average revenue per subscriber associated with these distribution channels, according to Cynthia M. Motz, vice president of Credit Suisse First Boston, New York. During the past year or so, “the power has shifted back to the carriers, which don’t have to put up with price undercutting from the resellers,” said Jeanine Oburchay, associate director of Bear, Stearns & Co. Inc., New York. Better control of reseller channels, the shift away from leased pagers and other efforts to improve operations have started to pay off for paging carriers. “It’s evident from the upgrades in ratings over the past several months that (securities) analysts are getting more comfortable,” Oburchay said. That sanguine view isn’t shared by Jane Snorek, research director and portfolio manager for Oberweis Asset Management, Aurora, Ill. “Growth investors want earnings per share and value investors want cash flow, so people in paging stocks would have to be value investors,” she said. “Paging companies have never gotten over their enormous debt load, even [Paging Network Inc.], the very biggest (carrier) with the most subscribers. We have definitely exited the paging industry.” However, Coleman said he believes the advent and expansion of enhanced messaging services promises to be one of the most significant revenue growth drivers for the industry. “The PageWriter is like a mobile e-mail whose utility can’t be duplicated by a cellular or [personal communications services] phone, and it doesn’t require me, as a consumer, to learn anything new,” he said. “There is a ton of life in it. The functionality is exponentially higher than one-way.” … Read more
More paging consolidation expected
NEW YORK-The merger spree in the paging industry during the past few years currently is at a lull, but acquisition activity is not over by any means. “Among the top 10 or even the top seven, there is more consolidation to come,” said Jeanine Oburchay, associate director of Bear, Stearns & Co. Inc., New York. MobileMedia Corp. “would definitely become a target” for acquisition if it emerges from bankruptcy with the plan now before the court, she said. That proposal, if approved, would leave the paging carrier with about $150 million in debt and a debt ratio of less than twice cash flow, which is “significantly lower than anyone else.” Cynthia M. Motz, vice president of Credit Suisse First Boston, New York, said she doesn’t believe any other paging carrier necessarily would want to acquire MobileMedia. Besides financial difficulties, she said there may be problems at the middle-management level of MobileMedia that other paging companies would be reluctant to inherit. Brian G. Coleman, director of Toronto Dominion Securities USA Inc., New York, thinks MobileMedia could be an acquirer. “Based on the numbers we’ve run, it would be levered at less than two times cash flow. That would give it quite a bit of acquisition capacity,” he said. “I would say MobileMedia could be a consolidator, a vehicle to consolidate the industry.” Arch Communications Group Inc. is another likely candidate for pairing, Oburchay said. “It has a nice solid (customer) base and great margins. It needs a transaction that gets it less leveraged than it is now.” … Read more
New Nokia phones include the second-gen Communicator
HANOVER, Germany-Nokia Corp. introduced three new handsets for the 900 MHz Global System for Mobile communications market this week at the Cebit ’98 exhibition in Hanover, Germany. The Nokia 8810 weighs less than 3.5 ounces and features built-in data communications capabilities with infrared connectivity, call profiles and caller-grouping functions. Nokia’s second-generation Communicator, the Nokia 9110, offers data communications capabilities, including access to the Internet, e-mail, telefax and short message service, as well as providing the user with several personal organizer functions and wireless imaging, said the company. The Nokia 8810 and 9110 Communicator are scheduled to be available in GSM 900 MHz markets during the third quarter. … Read more
Paging and the consumer mindset
Paging carriers and industry analysts alike believe one of the biggest struggles facing the industry is that it needs to change its image in the mind of the consumer. For years, paging carriers marketed themselves as a cheap communications tool. Today, they want to market themselves as value-added information providers. According to Wayne Stargardt, vice president of marketing at PageMart Wireless Inc., the business user is a fairly easy market to target. “We don’t have to sell this to them,” he said. “They’re waiting for this.” But the consumer market is a whole different beast. “Anytime you’re shifting a universal thought on a product, it’s very difficult,” said Steven Kellogg of Steven Kellogg Wireless Marketing in San Marcos, Calif. “It’s like pulling at a train with your teeth.” Stargardt agreed. “One of our biggest challenges now (is) to communicate to consumer users the added value they will achieve.” Analysts say an easy trap for carriers to fall into is to become so enamored with the new technology that they lose sight of the market. Bick Truit, president of the marketing consulting firm Technologies Research Group Inc., said this is a common error. “The mistake most technology companies make is they make a technology evolution path instead of a market segment evolution path,” he said. Telephone companies, for example, send customers all sorts of information about new services like caller ID and such to customers subscribing to the most basic service plans-essentially overshooting the target, Truit noted. … Read more
FPGA boom predicted, as prices drop
NEW YORK-Field-programmable gate arrays are poised to become the next key driver in the trend toward smaller, less expensive, more powerful and more quickly deployable cell sites, according to a new report by Allied Business Intelligence, Oyster Bay, N.Y. Unlike the Application Specific Integrated Circuits widely used today, FPGAs “can easily be programmed and reprogrammed, so they allow for fast (network) deployment,” said Laurence Swasey, senior analyst for Allied. “With ASICs, you (the carriers) code them, you send them to the vendor, which produces them and sends them back to you. The process takes two to three months.” By comparison, getting field-programmable gate arrays up to snuff can be done on site at a carrier’s facilities within a matter of days. But they do cost more, and that has been a hindrance so far to their broader usage as an infrastructure component. “FPGAs were five to ten times more expensive (than ASICs), but they are now about three to five times more expensive,” he said. Swasey attributed the drop in price to increased volume and quality of FPGA production, prompted by carriers’ growing realization about the advantages of this new network component. Xylinx and DynaChip are two manufacturers of field-programmable gate arrays with which Swasey said he is familiar. … Read more
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