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. Last Updated: 07/27/2016

Paging Firms Diversify to Survive

Although only a handful of Moscow paging companies still exist from the 30 or so that were operating at the end of the 1990s, the survivors are looking to a future away from traditional paging services and diversifying aggressively into other ventures as they acclimate to the ongoing fashion for mobile phones.

Call centers, car security devices and pocket computer technology are just some of the new services paging companies have developed to stay in business.

Paging equipment importer Future Telecom estimates Russia's paging market was worth $100 million in 2001 and expects paging companies' subscriber numbers to reach a total of 700,000 this year, up from about 600,000 a year ago. Paging companies say the strongest growth is in remote regions where cellphones are more expensive to operate.

Grigory Shershnev, director of Moscow operator Astra Page, said Moscow paging companies have taken the brunt of the cellphone boom, while companies operating in less-populated regions where mobile operators have less penetration have not been affected as intensely. Demand had weakened most in the last two years, he said.

"The first year mobiles appeared was very good for us because our prices were so much lower," Shershnev said. "The competition really started in 2000, when the price war between mobile operators began and they started taking clients from us."

When cellphones became widely accessible, he said, paging companies were forced to take stock and devise new business plans. Astra Page is now gaining more corporate subscribers, although its overall client base has been severely reduced over the last couple of years.

Paging companies have taken various routes to survive. While some providers remained in business by concentrating on roaming and offering regional services, some merged with other companies. Some simply closed down.

"The avenue we took was to try to diversify the business, so in 2000 we started offering a service where paging messages could be copied to mobiles and e-mail addresses," Shershnev said. "Then a year ago we started working on new projects, including a call center, and now our business is half paging services and half call center."

The call center has seats for 90 operators to take phone calls from customers on behalf of companies running promotions or needing to outsource their customer service to a hot line. These mostly tend to be banks and insurance companies, Shershnev said. Astra Page expects a 200 percent increase in call center traffic this year, with slower growth in 2003. Shershnev also said the company is looking at involvement with the direct-marketing industry.

Another paging operator, Inform Excom, still offers traditional paging services but has moved into providing a vehicle anti-theft security system called Autolocator with its sister company MegaPage. Autolocator is an alarm system that sends a message to an operator at the paging company when the vehicle is broken into. The operator is then immediately able to determine the whereabouts of the car using signals from base stations around the city, and a "chase team" of private security guards is sent out to recover the stolen car.

If necessary, the operator can remotely immobilize the car's motor and bring it to a halt. The service costs from $1,200 to install, and monthly subscription fees range from $29 to $39.

Inform Excom director Craig Anderson said classic paging services now account for about 50 percent of his business, and this share is shrinking.

"Now paging is no longer our core business," he said. "Paging was booming between 1994 and 1998, and you could sell as many pagers as your stockroom could hold. But now it's more of a niche market than it used to be.

"As paging declined, paging companies looked into other avenues to follow. Companies had to look at the issues at hand and either compete against mobiles or interact with them."

Inform Excom developed Moscow's first two-way paging, or "twaging," system and also launched M-Text, which allows subscribers to receive text messages to their cellphones via an operator. The service costs between $2 and $7 per month. The main advantage, according to Inform Excom, is that users can receive messages without disclosing their phone number.

VessoLink is another paging company focusing on new areas. It has been working on services for pocket computers, and recently invested more than $2 million to develop necessary technology.

"We are reorienting ourselves to becoming an information agency, which is linked to the growing pocket computer market," commercial director Vladimir Volkov said.

VessoLink is developing information systems that send messages and news updates to pocket computers as SMS and e-mail.Volkov said the company expects serious growth in its income from these services next year, but declined to give specific targets.

RadioPage offers a voice mail system whereby users receive a message on their pager that a voice message has been left for them. The user then calls their personal ID number to hear the message. It also has a call center and re-routing of pager messages to e-mail, among other services.

"Paging services have become significantly cheaper, and some companies that have difficulty paying for mobile communications are returning to pagers," RadioPage spokesman Alexander Simakov said.

Although paging companies expect traditional paging to take a back seat in favor of newer technology and diversified services, they say they intend to persist with paging on a lesser scale.

Astra Page's Shershnev said the paging side of the business still plays an important role in the company's strategy, with most users now corporate clients.

"One trend is that companies don't want to give mobiles to drivers and couriers when it's cheaper to give them a pager," he said.

VessoLink's Volkov said the company has no long-term plans for its paging segment and aims to maintain the existing client base rather than attract new users. "In 1998, we had about 100,000 clients, and now it's dropped to almost half that. But paging is a special niche and there will always be demand for it."