Paging operators are upbeat about the future growth of the business even as they wage wars with each other to carve out markets.
In 1995, the very first year of launch, more pagers were sold in India than in the US in the first 15 years. About 1.15 lakh pagers were sold in the market by the year end. While the cellular phone has become an up-market instrument, pagers have become the common mans gadget with more than two million people being exposed to paging services.
The paging market has registered a 10 per cent growth per month since March 1996. By the end of 1995, 27 paging-service operators started functioning in full capacity in 27 cities across the country catering to about to 4.25 lakh subscribers. Some time this year the scope of paging services will be expanded to the state circles. And paging operators are even more upbeat about the coming years. We expect the total number of pagers in the market to reach the one million mark by the end of this year, says Pravin Kumar, president, Indian Paging Services Association (IPSA).
Industry sources expect over 60,000 pagers to be put on air every month over the next few years. But so far, the growth has mainly come from the major cities. Mumbai and Delhi alone account for about 40 per cent or 1,90,000 subscribers. Trends indicate that paging has gained momentum in other major cities as well. Cities like Chennai, Hyderabad and Bangalore added an average 3000 pagers every month during 1996. They were followed by Calcutta, Pune and Ahmedabad, with around 1500 pagers being added each month.
Unlike the rest of the world, it was the alpha-numeric pager which allow both numbers and messages to be displayed that caught on in India first. Says Karthik Bhaskaran, regional manager, Casio Bharti Mobile Communications Ltd, The world over, numeric pagers account for nearly 80 per cent of the sales while the rest is accounted for by alpha numerics. But in India, it is the reverse. The trend seems to be changing now with numeric pagers catching on. Numerics, which had a five per cent share of total pagers initially, today have a 35 per cent share. The growth in numerics is expected to further push up subscriber figures.
But even though subscriber numbers present a rosy picture, pager companies are still struggling to make profits. We had to do away with the registration fee of Rs 500 and the Rs 1500 security deposit in December 1996 due to the poor offtakes, says B V Rao, director, Swan Nest Business Solutions, a Pagelink dealer.
Kenneth J Pinto, vice-president, operations, Microwave Communications Ltd points out, The markets have always evolved from the bottom and moved towards the top. However, Indian players marketed their products in such a way that the reverse took place. Hence the expected volumes have not been reached. According to industry sources, given the huge investments in infrastructure and other costs, an operator needs a subscriber base of at least 1,50,000 to break even.
According to some players, offering more value-added services and upgrading existing technology are the only ways to enhance pager reach. Quantitatively, the paging service has been improving consistently since it was introduced in the Indian market. But qualitatively, a lot needs to be improved. The coming year will be one of qualitative improvement in paging services, says Kumar.
A start has already been made. Sports links introduced during the historic India-Pakistan quarter final at Bangalore during the Wills World Cup marked the beginning of value-added services, says Kumar. Now, Modi Telstra has a tie-up with The Asian Age to flash important news items to its subscribers at certain hours of the day. Mobi Link, a conglomerate of the Dalmia group, and Korean firms: Sukyong and Samsung, has decided to concentrate on the financial markets. Mobi Link flashes the rupee exchange rate and stock market quotes periodically. It has managed to build a subscriber base of 85,000.
Besides, almost all the operators have services like personal link, group link, information link, news link and voice mail. As part of its strategy to capture new markets, Modi Page, a joint venture between the Y.K Modi group and Korea Telecom, introduced numeric pagers and a voice mail service in 1995. Its voice mail service enables subscribers to receive the message in the callers voice. It stores voice messages either till the mail box owner receives the message or for a pre-determined length of time. The company claims to have carved a 13 per cent share of the market with its 55,000 subscribers.
Mobi Link not only has a similar Voice Link service but also offers a Multi Link or roaming facility that allows the subscriber to use the pager in ten major cities in India. Mobi Link claims it has a 30 per cent market share.
The next round of value addition for most paging operators will be to provide a two-way paging and roaming facility. The first will enable subscribers to both receive and send messages while the second will allow him to retain his subscriber identification module card wherever he moves. So the subscriber wont have to change his number. This will ultimately lead to a seamless national paging network.
Offering value-added services is not the only strategy paging operators are using to corner market share. They are also waging marketing and price wars. Industry sources point out that pagers that were available for Rs 12,000 a year ago are today being sold for Rs 6,000. Paging services have got another boost from DoT, which has allowed operators to increase service charges to Rs 250 from the earlier Rs 150. This encouraged operators to slash pager prices.
Apart from reducing pager prices, operators are also pushing various hard-sell schemes. For instance, Pagelink has tied up with Kotak Securities. Customers opting for Kotaks fixed deposits above Rs 10,000 are given a free pager.
While paging operators are fighting among themselves for market share on one hand, on the other, they also have to collectively deal with competition from the cellular phone industry. Since both services were launched fairly simultaneously in the country, cellular phones have affected the growth of the pager industry.
People are currently confused about their choices. They dont know which service will fit into their requirement, says Kumar. But while cellular phone will be confined to an upmarket segment, pagers have a larger potential market since they could become the common mans gadget.
So far, though, the operators havent been able to project the two products as distinct ones, which has led to customer confusion. A product with two-way communication is always better than a one-way communicating device. But once the general awareness among people grows, and the advantages of pagers as the cheapest mode of communication is understood, the market will grow, believes Rao.
Meanwhile, pagers need to improve their image to broaden the base. This image of pager as a salesmans gadget should be changed into that of a social instrument, if the operators want to improve the situation, says Ajay Sachdeva, marketing manager, India and SAARC, Motorola.
To some extent, paging operators have also been guilty of neglect. While they promise to deliver the message unobtrusively, complaints of messages being dropped or getting lost abound. Paging operators point to technological limitations resulting in overloaded channels, thus shifting the blame onto the Department of Telecommunications (DoT).
DoT is not focused on the issue. Pagers were the first to enter the market but now the paging sector is being neglected by the government. They are giving greater importance to cellular services, says Rajiv Agarwal, joint managing director, Modi Korea Telecom.
The present technology standard, called the post office code standing advisory group (pocsag), which is a single frequency channel, is sufficient to support around 40,000 subscribers. But most paging operators have crossed that mark After long deliberations, DoT sanctioned a second frequency channel for pager operators earlier this year. This is expected to ease the pressure from the existing channel.
But some operators like Pagelink plan to overcome these limitations by moving to a new technology standard, FLEX, which is a synchronous protocol which has a higher capacity than Pocsag, which is an asynchronous protocol. FLEX has been developed by Motorola. Pagelink plans to introduce this within six months. So with both the allocation of a the new frequency and with a new technology, paging operators are expected to cater to higher numbers comfortably.
Yet, this remains a partial relief. The success of paging will largely depend on DoT allowing the use of high-speed technologies, which will allow almost five times as many subscribers to be accommodated on the same frequency. DoT has been slow in introducing policy changes. Its decision-making process has slowed down further, which is a major problem for us, says Kumar. Adds Agarwal, The introduction of a high-speed technology will help boost the market and will certainly improve the quality of the service. Over to DoT. (With inputs from Vinay Pandey)
