Juan Santos, an ophthalmologist at the St. Luke’s Medical Center in Quezon City, fondly recalls the days when paging devices played a key role in the profession, but he does not necessarily miss those times.
Pagers, nicknamed beepers for the ubiquitous noise they would make to remind users that they were needed somewhere or by someone, broke down communication barriers for various professionals and businessmen who needed to be “on call” without having to resort to more costly analog mobile phones.
Even at the industry’s peak from the early to mid-1990s, the more popular alphanumeric pagers had severe limitations, some of which may seem alien to many Filipinos of a certain young age today. Pager communication, while mobile, was a one-way affair as earlier models were unable to respond to simple text messages. Users, instead, had to find a landline to contact the sender.
For doctors like Santos, a long-time pager user until 1997, inaccuracies in medical jargon caused by human operators coupled with game-changing technologies like cheaper, SMS (short message service)-enabled mobile phones led to the inevitable shift.
“Doctors normally wouldn’t have made that change unless the advantages were overwhelming,” Santos said in an interview.
The medical industry, the first to adopt pagers, was not alone in shunning the paging industry. By the time the Gokongwei group’s Digitel Telecommunications Inc. launched its cellular business in 2003 to challenge incumbents Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, no major pager players remained.
Now, more than a decade since the domestic pager industry’s demise, the Inquirer rounded up various industry stakeholders to explore anew the factors that caused the downfall of the business, the fate of some of its players and the lessons technology companies have learned in this rapidly changing landscape.
Beginnings
The commercial pager industry traces its roots to hospitals in New York City in the early 1950s but its story in the Philippines begins in the 1970s with PocketBell, operated by Philippine Wireless Inc.
The technology then had evolved into personal transistor radios that doctors would carry at all times and messages were delivered in the form of a broadcast.
PocketBell predated all other pager players and operated a virtual monopoly until a shareholder struggle allowed the new management led by the Santiago family to take over in the early 1990s, said Brian Santiago, a director of listed Philippine Telegraph and Telephone Corp. (PTT).
PTT, which owns Philippine Wireless, is currently undergoing corporate rehabilitation as the business also suffered from the decline of its telephone business and the effects of the Asian financial crisis in 1997.
The shareholder struggle, nevertheless, happened as the political winds swept the Aquino administration, led by Corazon “Cory” Aquino, into power via popular revolt in 1986, ending the decades-long rule of strongman Ferdinand Marcos. Part of the new government’s policy at the time was to liberalize certain sectors, including telecommunications, allowing several new players to come in.
From just one company, the pager industry swelled to as many as 11 competitors at its peak, data from the National Telecommunications Commission showed.
Some of the names on that list were Island Country Telecoms
(JASPage), Multi-Media Telephony Inc. (Index) Message Systems (Recall 138) and even PLDT’s Smart Communications Inc. (Smartpage).
But towering above them were PocketBell and EasyCall Communications Inc., both of which claimed about 50 to 60 percent of the more than half a million “active subscribers,” Santiago said in an interview.
“As long as we had the general amount of scale, paging was profitable,” he said.
The business also had lower capital spending requirements, allowing players to start up easily, if not flourish for a time, NTC director for regulations Edgardo Cabrios said.
“Many players came in because it was cheaper to set up a paging company,” said Cabarios. He said that, on average, a new player needed less than a handful of base stations to serve a city like Metro Manila, versus the thousands required by cellular companies today, which also have millions of customers.
But it wasn’t just the relatively low investment that helped make the pager business feasible. The industry was bringing in new technology via alphanumeric pagers at rates far cheaper than analog mobile phones.
Pager subscribers typically had to pay P200 to P600 a month, on top of about P6,000 to P20,000 for a unit, Santiago said. Those sums might seem steep for that time, however, Santiago pegged the cost of analog phones at P30,000 and calls at P8 a minute.
“Pagers cost quite a bit of money but that is essentially the postpaid market of today so they were able to afford it,” Santiago said.
The major shift came when texting became available with the adoption of the Global System for Mobile Communications standards, or GSM, which now accounts for the bulk of mobile communications globally.
That shift was initiated in the Philippines in 1994 by Isla Communications Co., which was later acquired by the Ayala Group’s Globe. In 1999, PLDT’s Smart also started to ramp up its GSM service.
Competition
But it took several years before the use of SMS became widespread, according to Manny Estrada, who heads network technology strategy at Globe.
In an interview, Estrada said SMS started to boom after early efforts to educate people on how to send text messages, which was a free service at the time, and once prepaid services were rolled out in the late 1990s.
“We knew then that it was only a matter of time before [texting] would overtake the capabilities of paging,” said Estrada, noting that Globe considered but ultimately ditched a plan to enter the pager business. “We saw that SMS traffic was higher than voice.”
For Smart co-founder Orlando Vea, the move was not aimed at removing the paging business—Smart was also offering paging services—but it proved to be collateral damage given technological innovations at the time. Nevertheless, the development was yet another case of how disruptive technologies can swiftly displace incumbent players.
“We were anticipating the threat of text to a certain extent but it is one of those things like the Internet. It came out of nowhere,” said Santiago, noting that they were planning to introduce “two-way paging,” allowing the receiver to send a response text message.
“But basically cellular moved too quickly and we were on the wrong side of the standard,” he said.
The impact on the paging industry accelerated, prompting Pocketbell to end its service.
Business shift
By 2002, EasyCall, whose officials declined to comment for this article, finally exited the paging business as it shifted to call centers, helping to keep its head above the water unlike several competitors.
Cabarios noted that several companies simply ceased to operate while others were bought out. This was the case with Multi-Media Telephony, acquired by the Lopez family and since renamed ABS-CBN Convergence, which launched in November 2013 a mobile phone service using the network infrastructure of Globe.
Like EasyCall, the Santiago’s have been working to revive their businesses.
With paging gone, Philippine Wireless has since shifted to offering Textwise, a prepaid-based service allowing cheaper rates for Filipinos seeking to communicate with family and friends abroad, according to George Wang, a consultant with the company.
As Internet services would eventually dominate, Wang noted that they were moving to offering cloud-based services as well.
PT&T, meanwhile, has been shifting its focus to offering broadband services mainly to corporate clients and the business continues to grow, Santiago said. This puts them in direct competition with old rivals like Globe and PLDT, but Santiago noted that they were serving a niche market.
“We intend to dominate in the niches that we are in,” he said.
While the fate of the paging business again proves that technological shifts are the ultimate equalizer, that does not mean businesses cannot anticipate the future, Estrada said.
“The bottomline is that you have to understand user trends and what your customers are doing to see the next wave of technology,” he said.