THE EVOLVING BEEPER:
Latest Service Could Spark Renewed Demand
March 17, 1997
Beepers are evolving into portable communication tools. (Photo: NTT Docomo)
Beepers are evolving from chatting tools for teenagers into handy, inexpensive terminal devices for up-to-the-minute information.
In March, Japan's leading paging service company began transmitting news updates and other information free of charge in the greater Tokyo area. The information includes news dispatches from wire services, weather forecasts, and sports updates (including baseball, sumo, and soccer results) and is transmitted daily between 6 a.m. and 10 p.m.
A similar service is already offered by some FM radio stations, which broadcast text data to sets that can display them. The beeper service uses stronger signals, however, and the area served is wider. To receive the data, one must have a model that can display up to 50 Japanese characters of text and retails for a suggested 17,000 yen (142 dollars at the rate of 120 yen to the dollar).
"For the time being, we'll be offering general news and sports updates free of charge," a spokesperson for the company providing the service said, "but in the near future we'll be adding such new features as headlines of leading newspapers for, say, 100 yen (83 cents) a month and up-to-the-minute horse racing results for around 300 yen (2 dollars 50 cents) a month. We believe these new services will fundamentally change the beeper's image."
Shoring Up Sales
The use of beepers has spread dramatically over the past decade, particularly among teenagers. As of the end of 1996 some 10 million units were in use in Japan. Part of the reason for the popularity has been the beeper's evolution from a simple paging device into a versatile communication tool capable of displaying numbers and letters.
When Nippon Telegraph and Telephone launched a paging service back in 1968 (when it was not yet privatized), beepers were packed with transistors and extremely bulky--taking up seven times the space of today's models. Even after a full night of recharging, moreover, they could be used for only 10 hours. There were just 5,000 subscribers in the first year, most of them being such professionals as doctors, police officers, and journalists.
Continued efforts to make the devices smaller and lighter paid off, though, when a model capable of displaying the number of the caller sparked a jump in new subscriptions in 1987.
Initially, NTT considered beepers to be a way of generating revenues through rental fees. The phone company also hoped that they would encourage more calls. Business workers whose pagers were called, for instance, would not only phone their offices but often make an additional call after learning that a client wanted them to call back.
Displaying the caller's number eliminated the need to confirm who was phoning, thus cutting into the phone company's earnings. Ironically, though, the decision to place user convenience ahead of revenues spawned an explosive growth in the use of the devices. NTT's privatization, which also marked the end of the company's monopoly on the telecommunication market, and prospects of rosy sales prompted other companies to start offering paging services.
Since then new features have been added. In 1990 a model capable of displaying 20 preset messages ("call back," "await instructions," for instance) was introduced. The result was sales of 130,000 units during the first year--more than 10 times initial projections.
And in 1994 a model allowing the caller to send any typed message of up to nine characters was launched. By this time, beepers were frequently heard going off on the streets and on campuses. They were especially popular among teenage girls, many of whom kept up conversations by exchanging messages to each other. So many calls were made around the summer of 1995 that transmitting equipment could not always handle the heavy load.
Rates until then had been a flat 2,000 yen (17 dollars) or so a month, regardless of the number of calls. The heavy traffic prompted paging companies to set new rates; those who made more than 200 calls a month, for instance, were charged 30 yen (25 cents) for every 50 additional calls.
The beeper explosion appears to have hit a snag over the past year or two, however, the biggest factor being the launching of the PHS ("personal handyphone") service in July 1995. The PHS is a mobile phone system with much cheaper handsets and rates than cellular phones.
The PHS's entry sparked a price war, thanks to which cellular subscribers swelled to 19 million as of the end of January 1997 and PHS users reached 5.2 million. Figures on new beeper subscribers have been declining somewhat since then, but the latest service could trigger renewed growth in beeper sales.