Page me (but you'll pay for it)
The pager industry is booming, but it could do even better if sending a message were not so expensive. The telecoms regulator should be looking at the high hidden costs of the `caller pays' system, writes Steve Homer
Tuesday 12 August 1997
She put 50p in the phone, the only change she had. "I got through and left the message: `All the trains are delayed so I'll be late.' But the woman at the other end, who had a strong accent and had trouble understanding me, said `I'm sorry', and then I got cut off. The 50p went in a few seconds." Not surprising when you are charged pounds 1.46 a minute to call in to various pager services. A nice little earner, in fact.
The paging industry in Europe is enjoying a major boom. Sales of pagers are climbing at around 30 per cent a year. The industry is particularly hopeful for even more growth as Europe lags far behind the American market. In Europe, around 1.5 per cent of the population has a pager compared with 15 per cent in the United States, according to a recent Eutelis report.
Nearly all the growth in paging is in the so-called "calling party pays" sector. After you have paid out around pounds 75 for a pager you never have another bill to pay, apart from buying batteries - but pity any sucker to whom you give your pager number, because the system is paid for by the people who call you.
In the UK the big players are BT with its EasyReach pagers and Vodafone with its VodaZap service. With BT you ring the pager number, a woman answers the phone - it is nearly always a woman - you dictate the message and hang up. From a normal phone the caller is charged 55p irrespective of how long the call lasts. So if you call up and then change your mind, that is 55p down the tubes. "See you in the Rose and Crown." 55p. Oh, it's only 35p off peak.
Vodafone is slightly different, charging 50p a minute. This should work out cheaper, but to leave a message you have to listen to the owners' recorded message, go through a menu and have the phone picked up. When I tried it I got about three seconds of "on hold" music, which suggests that at some times of day the system is stretched and you are left on hold coughing up 50p a minute straight into the coffers of Vodafone. This raises questions about any incentive for the company to improve its service.
For the unwary punter, the system is a nightmare. Charges from phone boxes are, well, interesting. When I explained to Linda that she had run out of money because she was being charged a rate of pounds 1.46 a minute for the call, there was a brief silence. "That's such a rip-off. I'm stunned." And what really does make it a rip-off is the number she was calling. Her partner had a Page One pager. But the area code - 01523 - looks very much like a normal phone number. One of BT's EasyReach area codes is 01426; again no indication there that you will be charged premium rates.
To add insult to injury, if you ring a BT operator to ask about charges for calling various pager services you are likely to get the wrong pricing information. Out of 16 calls to the operator to check the price of the call to a pager, 14 said calls to these numbers were at local rates; that is, 4p a minute. And with none of the services announcing to callers how much they are being charged when ringing in, there really is no way for customers to know what the charges are.
So how does the industry justify these prices? "It can't be that high," says Chris Bullick, European director of marketing for Motorola pagers. "I am surprised," he continued in rather shocked tones.
"Operators in general need to be a bit careful," said Gregor Bleimann, deputy operations director at Philips Consumer Communications, another big manufacturer of pagers. But he hurriedly added: "I really don't want to get into the situation of analysing the amount of money BT is charging." And he doesn't need to; Motorola and Philips just make the hardware. The pagers themselves are sold in a completely transparent way. In Dixons, or wherever you buy them, pagers are sold just like toasters or televisions. None of the money earned from pager calls finds its way back to the retailer or the manufacturer of the pager.
So how does BT explain 55p a call? Isn't this a bit of a whopping charge? "I don't believe it is," says Jim Brennan, BT marketing manager for pagers. "If you can contact someone and get them to collect the milk for you and save a journey then it saves you money. We think it is worth the price." Hmmm.
But you don't even get good service for your money from BT. Pagers can be very useful things. They are small and unobtrusive and a very good way of managing your communications. But in London and many other cities you miss your messages when you are out of coverage - when you in a car or train in a tunnel, or using the underground. Mr Brennan proudly points out that you can tell if you have missed a page as each message is numbered. However, unlike the older systems where you leased the pager from the company, you cannot ring in and get them to resend the messages. "Well, but you do know that you have missed a message," says Mr Brennan rather lamely. To its credit, Page One does offer this service, but it will cost you 55p each time you ring in to get them to resend the missed message.
Oftel, the telecoms industry regulator, has nothing to say on this subject. "We haven't had any complaints," says an Oftel spokeswoman. When the Independent pointed out they had probably had no complaints because no one knew they were being charged these prices just to leave a message, the reply was the same: "We have not had any complaints."
Reminding Oftel that its first responsibility under the Act of Parliament that set it up was to protect consumers' interests seemed to have no effect, either. All this is a pity. If the charges were set at a more reasonable level, more people would be tempted to buy pagers and the industry could really take off.
Gregor Bleimann of Philips certainly feels that we need to do more to encourage pager use in this country. His figures confirm that growth in Europe is around 30 per cent a year, but in the UK he says it is nearer 20 per cent.
"Other countries are being a bit more creative in the marketing of pagers. In Holland, we recently had a scheme where customers collected 10 Pepsi labels and then got a pager for under pounds 10. The only catch was they had to agree to accept marketing messages which did things like promote Pepsi- sponsored events." That promotion alone resulted in the sale of well over 100,000 pagers in the space of three months.
As cellular becomes more and more pervasive, paging needs to be marketed more to the youth market, says Mr Bleimann . He believes there needs to be a big promotional push aimed at 14 to 25 year olds. "Operators and manufacturers need a targeted approach. The colours and features of the pagers need to be right for this market. Research with children shows they don't want a noisy pager going off in the classroom. What they want is a dog barking or a cat miaowing." They also want animated cursors to make the interface more fun.
But if these pagers are going to find their way into the hands of schoolchildren, how many of them will want to pay at least 50p to send a message saying: "Meet you behind the bike shed for a ciggie after maths"?
And pagers do have something to offer us all. For just pounds 10 a year football fans can receive every result in the Premiership and other major matches, and you even get information of transfers in the closed season. There is cricket coverage during the summer, and a lottery service that will bring you the winning numbers as they are drawn, and there are myriad financial services, news headlines and a lot more besides.
So if you think that owning a pager might be a good idea - but also think that a cost of 55p a message without your friends being told they are paying that much is a bit of a rip-off - you might like to complain to Oftel so they have something to work on.
Send your comments to Don Cruikshank, Director General, Oftel, 50 Ludgate Hill, London EC4M 7JJ, or ring 0171-634 8888
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