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US PAGING MARKET REPORT

There are two Paging markets, the "Public" and the "Private" markets. Or the "Subscriber" and the "On-site" (On-premise) markets. I went back through all the materials that I could find, talked to many people working in the Paging Industry, and put together a short Paging Market Report that follows below.

If there are mistakes maybe they will evoke comments and corrections. Whether you think it is good or bad is not important; we need to know the facts. Everyone needs to know—analysts, investors, manufacturers, academics, and marketing people. I had to estimate some of the Paging market attrition. If you have access to more accurate figures, please share them with me. It is for the good of our industry. People in the cellphone industry can go to the CTIA web site anytime they want to and find out how many US subscribers there are. Why can't we?

The following report contains four sections:

  1. The total US Subscriber market estimate at mid-year 2005.
  2. The total US Subscriber Market estimate at year-end 2005.
  3. Arch/Metrocall/USA Mobility reported units in service (UIS) by quarter, tracked from 2004 through the end of 2005.
  4. A graph of the total unit erosion from the table in point 3 above.

The fourth quarter 2005 numbers are estimates, since this report was done in December of 2005 before the fourth quarter USMO numbers were made public.

 

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ESTIMATE OF 2005-MID-YEAR SUBSCRIBER PAGING UNITS IN SERVICE IN THE USA

RANK CARRIER UIS SHARE   COMMENTS
1 USA Mobility 5,348,000 60.3%   The source of all the information in this report falls into the following categories:
  • My independent estimate
  • My estimate confirmed by key contacts in Paging companies
  • Publicly available information from News Releases, 10-Qs, Annual Reports, etc.
  • My estimate based on prior reports with the current average attrition applied
  • Estimates from persons well acquainted with the subject companies

Unfortunately, everyone doesn't tell the truth. Some responses were of questionable accuracy. In spite of best efforts to minimize errors in the total, some double counting may be included because of reselling on other systems.

The category "others" includes all paging companies below the 20th rank. It is difficult to estimate this group but the assumption is based on the fact that most of the smaller, traditional Paging companies, have been acquired by larger Paging companies over the last several years and that very small Paging companies of below one or two thousand subscribers are generally not feasible as stand-alone businesses. I don't think the estimate of 200,000 UIS spread across 50 states is unreasonable.

I welcome comments and corrections. This information is being supplied because we need to know. It is not pleasant to compare the current 8.9 million UIS to the peak of 45 million that we hit in 1999, but everyone that I talk to agrees that the Wireless Messaging industry seems to be stabilizing. Now vendors can make plans based on realistic numbers, and we all know the status of our business here in the USA.

Notes:

  • 19 & 20 are not individual Paging companies, they are shared Networks and Associations of Paging companies. Their UIS number is the total of all the member companies' units in service added together. Their order of appearance or rank is not important.
  • 19—TAPS = the Texas Association of Paging Services (several member companies operating a shared network)
  • 20—SouthernNet = SNAP = the Southern Network Association of Paging (several member companies operating a shared network)
  • n/a = name/anonymous
2 Verizon 1,155,000 13.0%
3 SkyTel 750,000 8.5%
4 SBC/AMSI 530,000 6.0%
5 Teletouch 156,000 1.8%
6 n/a 104,000 1.2%
7 n/a 95,000 1.1%
8 Indiana 73,374 0.8%
9 Aquis 70,000 0.8%
10 UCOM/NE 65,000 0.7%
11 Unity 40,000 0.5%
12 n/a 35,000 0.4%
13 n/a 25,220 0.3%
14 n/a 25,000 0.3%
15 n/a 25,000 0.3%
16 n/a 23,750 0.3%
17 n/a 23,000 0.3%
18 Lauttamus 8,080 0.1%
19 TAPS 44,121 0.5%
20 SouthernNet 76,500 0.9%
21 Others 200,000 2.3%
  Total: 8,872,045 100.0%

Circa June 30
pie chart


ESTIMATE OF 2005-YEAR-END SUBSCRIBER PAGING UNITS IN SERVICE IN THE USA

RANK CARRIER UIS SHARE   COMMENTS
1 USA Mobility 4,896,000 59.4%   The source of all the information in this report falls into the following categories:
  • My independent estimate
  • My estimate confirmed by key contacts in Paging companies
  • Publicly available information from News Releases, 10-Qs, Annual Reports, etc.
  • My estimate based on prior reports with the current average attrition applied
  • Estimates from persons well acquainted with the subject companies

Unfortunately, everyone doesn't tell the truth. Some responses were of questionable accuracy. In spite of best efforts to minimize errors in the total, some double counting may be included because of reselling on other systems.

The category "others" includes all paging companies below the 20th rank. It is difficult to estimate this group but the assumption is based on the fact that most of the smaller, traditional Paging companies, have been acquired by larger Paging companies over the last several years and that very small Paging companies of below one or two thousand subscribers are generally not feasible as stand-alone businesses. I don't think the estimate of 200,000 UIS spread across 50 states is unreasonable.

I welcome comments and corrections. This information is being supplied because we need to know. It is not pleasant to compare the current 8.9 million UIS to the peak of 45 million that we hit in 1999, but everyone that I talk to agrees that the Wireless Messaging industry seems to be stabilizing. Now vendors can make plans based on realistic numbers, and we all know the status of our business here in the USA.

Notes:

  • 19 & 20 are not individual Paging companies, they are shared Networks and Associations of Paging companies. Their UIS number is the total of all the member companies' units in service added together. Their order of appearance or rank is not important.
  • 19—TAPS = the Texas Association of Paging Services (several member companies operating a shared network)
  • 20—SouthernNet = SNAP = the Southern Network Association of Paging (several member companies operating a shared network)
  • n/a = name/anonymous
2 Verizon 1,108,800 13.4%
3 SkyTel 720,000 8.7%
4 SBC/AMSI 508,800 6.2%
5 Teletouch 149,760 1.8%
6 n/a 101,920 1.2%
7 n/a 90,250 1.1%
8 Indiana 73,374 0.9%
9 Aquis 70,000 0.8%
10 UCOM/NE 65,000 0.8%
11 Unity 9,000 0.1%
12 n/a 32,200 0.4%
13 n/a 23,959 0.3%
14 n/a 23,750 0.3%
15 n/a 23,750 0.3%
16 n/a 23,750 0.3%
17 n/a 21,850 0.3%
18 Lauttamus 7,999 0.1%
19 TAPS 43,239 0.5%
20 SouthernNet 74,205 0.9%
21 Others 180,000 2.2%
  Total: 8,247,606 100.0%

Circa December 31
uis end 2005


The following is a running analysis, from an “outsider's” view, based on publicly available information such as SEC filings and press releases. Q4-2005 is an estimate. Due to their large share of market, this information is very important to an understanding of the US Subscriber Paging Market.

Arch / Metrocall / USA Mobility 2004/2005 Performance as reported in SEC filings.    
Arch / Metrocall / USA Mobility 2004 UIS1
2004 First Quarter: One-way units lost Two-way units lost Total units lost Total units in service Rate of decline
(% of total)
Metrocall: -221,811 -17,711 -239,522 3,225,422  
Arch: -246,000 -13,000 -259,000 4,178,000  
Combined total: -467,811 -30,711 -498,522 7,403,422 6.31%
      
2004 Second Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
Metrocall: -205,961 -16,070 -222,021 3,003,401  
Arch: -202,000 -7,000 -209,000 3,969,000  
Combined total: -407,961 -23,070 -431,031 6,972,401 5.82%
    
2004 Third Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
Metrocall: -175,973 -13,526 -189,499 2,813,902  
Arch: -191,000 -6,000 -197,000 3,772,000  
Combined total: -366,973 -19,526 -386,499 6,585,902 5.54%
      
2004 Fourth Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
# Consolidated total: -336,000 -48,000 -384,000 6,201,902  
              
2004 Year-end Totals: One-way units in service Two-way units in service Total units lost Total units in service  
Consolidated total UIS: 5,673,000 529,000 -1,699,934 6,201,902 21.51%
      
USA Mobility 2005 UIS1
2005 First Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
UIS reduction: -316,000 -28,000 -344,000    
UIS end quarter: 5,357,000 501,000   5,858,000 5.55%
           
2005 Second Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
* UIS reduction: -256,000 -16,000 -272,000 (adjusted*)  
UIS end quarter: 4,876,000 472,000   5,348,000 8.71%
      
2005 Third Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
UIS reduction: -214,000 -18,000 -232,000    
UIS end quarter: 4,662,000 454,000   5,116,000 4.34%
      
2005 Fourth Quarter: One-way units lost Two-way units lost Total units lost Total units in service  
UIS reduction: -203,300 -17,100 -220,400    
UIS end quarter: 4,475,520 435,840   4,911,360 4.00%
      
2005 Year-end Totals One-way units in service Two-way units in service Total units lost Total units in service  
Total UIS: 4,475,520 435,840 -1,068,400 4,911,360 20.81%
* -238,000 one-time adjustment
Ending units in service at June 30th and revenue per unit for the second quarter reflect a one-time unit adjustment of 238,000 units. The adjustment was made in connection with the company’s recently completed billing system consolidation of Metrocall’s legacy billing system to Arch’s billing system. As a result of the consolidation, 77,000 units were adjusted due to the definitional differences between the two systems, and another 161,000 units were adjusted to remove cellular phones sold by Metrocall in prior periods that had been inadvertently counted as paging units in service in Metrocall’s billing system. The unit adjustment had no impact on reported revenue, income or expenses for the second quarter or previous quarters.
# First Arch/Metrocall consolidated report
1UIS = units in service (paging devices)

usmo erosion end 05


DO YOU HAVE ANY COMMENTS?

Do you have any comments about the state of the Wireless Messaging and Paging industry? Your opinions are important. Here is a place where you can make them known. Special thanks to those who helped out with this Paging Market Report. This is a community effort.

The size-of-market estimates in this report are based on a continuing analysis of market trends, interviews with senior managers of paging companies, and consultations with other industry consultants. They are accurate to the best of my ability. The difference between a guess and a good estimate is the amount of work that goes into the analysis beforehand. I have spent many hours preparing these materials and in my analysis of the US Paging Market.

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With best regards,

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Newsletter Editor

73 DE K9IQY

Brad Dye, Editor
The Wireless Messaging Newsletter
P.O. Box 13283
Springfield, IL 62791 USA
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Skype: braddye
Telephone: 217-787-2346
E–mail: brad@braddye.com
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