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THE CUTTING EDGE / PERSONAL TECHNOLOGY | TELECOM TALK
/ JUBE SHIVER JR.

Two Kinds of Paging, All Kinds of Debate

June 09, 1997|JUBE SHIVER JR.

A closely watched battle over the future of wireless paging is unfolding as providers tout two very different approaches to using the airwaves.

In one corner, the nation's largest paging company, Paging Network Inc. of Plano, Texas, has launched a $10- to $15-a-month voice-messaging service called VoiceNow.

VoiceNow eschews the interactive capability of its communications network, instead utilizing a pager that operates much like an answering machine. Rather than passing along alpha-numerical messages, it transmits the actual voice of the caller. To respond, the pager owner must use a phone.

The company contends the service is the best use of airwaves set aside by the Federal Communications Commission for two-way paging services nearly two years ago.

Meanwhile, rival SkyTel Corp., a subsidiary of Mobile Telecommunication Technologies Corp. of Jackson, Miss., is betting that consumers want a more interactive system similar to the e-mail that traverses the Internet.

For about $30 a month, SkyTel leases a pocket-sized, 5-ounce pager that lets users send and receive text messages on a four-line display screen.

The first generation of SkyTel pagers lacks keypads and has only rudimentary navigational buttons to enter text, so typing messages is difficult. But Motorola, the largest maker of paging devices, promises to deliver a more elaborate model with a tiny keyboard before the end of the summer.

The SkyTel two-way paging service is available in more than a dozen markets, including Los Angeles, New York, Washington and Dallas. The nationwide SkyTel network is expected to be completed before the end of 1998. Paging Network has launched its VoiceNow service in the San Francisco-Sacramento area as well as in Dallas and Atlanta. It expects to begin serving Los Angeles and the rest of the nation within the next 12 to 18 months.

"People have two clearly different choices" in technology, said Don Shirley, director for technology solutions for Paging Network. "Motorola presented both systems to us and [SkyTel]. But we didn't see a significant market developing for two-way paging. We came to the conclusion that voice was a better application. So far the numbers are tracking with our decision."

The Personal Communications Industry Assn., a Washington-based trade group, forecasts that the paging market in the United States will explode from 48 million subscribers to 70 million over the next three years, primarily because of demand for the new two-way paging services.

Although giants like Bell Atlantic Nynex Mobile Corp. and MCI Telecommunications Inc. are now rolling out the SkyTel service, experts say it is too early to declare which approach will win.

"I don't know if it's a question of who will prevail," said Dorothy Salmon, a telecommunications analyst for the Strategis Group consulting firm in Washington. "Voice has been popular, but two-way functionality is popular as well."

When fully in place, the new generation of paging networks is expected to transform a wireless industry that is already growing by leaps and bounds, fueled by a more mobile American work force and by harried families seeking ways to more easily keep in touch.

But it is an open question whether Americans are ready to embrace new wireless paging services that are three to six times more costly than traditional one-way numerical paging devices.

Some experts believe that two-way paging will come under immense price pressure from traditional low-end pagers, as well as from a more muscular generation of wireless telephones, many of which incorporate wireless paging in the handsets, eliminating the need for a separate pager.

"Traditional paging devices that cost $4 or $5 a month to lease offered a clear price advantage over cellular phones that were 10 times more expensive. But these new two-way pagers cost a lot more," said one wireless expert who declined to be identified. "There may be a big business market out there for them, but I'm not sure the average consumer wants to fool with another wireless device that is incompatible with all the stuff that's already out there on the market."

SkyTel and Paging Network are spending millions of dollars to convince consumers otherwise. This year, Paging Network is spending $20 million to advertise VoiceNow; SkyTel and its partners are spending more than $5 million this year.

And waiting in the wings are AirTouch Communications Inc., Ameritech Corp., PageMart and several lesser-known companies that have won licenses from the FCC to operate two-way paging services.

But even before two-way paging has been fully rolled out, at least one company has already pulled the plug on the technology.

In March, Chairman Robert Allen announced that AT&T, which has been preoccupied with defending its long-distance market share against rival MCI and Sprint, would not further develop its two-way paging licenses. The phone giant paid the FCC $164 million to acquire its license in 1994.

AT&T's decision was strictly an economic one and was not a reflection on the viability of the technology, said Ken Woo, a spokesman for AT&T Wireless Inc.

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