Network: IT Telecoms - Paging crosses the border

Will the European or US standard for international paging systems prevail? By Stephen Pritchard

Pagers are frequently regarded as the pauper's mobile phone. They are cheap to buy and use, but inflexible. They can only receive messages, not send them, they cannot handle data, and they can usually be used only in the country where they were bought. Paging in most of the world is based around a system called Pocsag, developed more than a decade ago by the Post Office and Philips. Pocsag was fine when people sent only simple bleeps, but it is struggling to cope with growing demand, especially from customers with text pagers.

Europe's telecommunications bodies saw the need for a new system, and with it the chance to establish a truly international standard. The system, Ermes, offered a highly advanced paging system that could be used across Europe.

Ermes is technically advanced. Pagers can receive very long messages - 9,000 characters, or around two sides of A4 text - and download data files directly to a computer. A single battery can power a pager for around six months. Most conventional pagers use a battery a month.

On paper, anyone who buys an Ermes pager can use it anywhere in Europe. The concept, known as "roaming", already works for mobile phones using the digital GSM network. But GSM roaming is expensive: callers pay mobile rates, and subscribers pay almost twice as much again to listen to incoming calls when they are overseas.

Ermes should be a cheap, simple alternative for international travellers. Paging is already a growing market. In France, paging is growing faster than GSM; Motorola, one of the largest manufacturers of pagers, says that its market grew by 35 per cent last year. Internationally, the trends are similar. Industry figures show 120 million pagers active in the world; by the year 2000, there will be 200 million.

Unfortunately, large numbers of those pagers are incompatible, and will not be able to roam. Ermes is the only international paging standard ratified by the industry's governing body, the ITU. But it is not the only system.

While the Europeans are backing Ermes - at least at government level - Motorola has produced its own standard, known as FL*X, which now dominates the United States.

Motorola says FL*X is open: the company will license it to other manufacturers who want to build FL*X systems. FL*X is less sophisticated than Ermes. It is not designed for roaming, although it can be done, and is limited to short messages.

The advantage is that FL*X is cheaper, easier and quicker to introduce than Ermes. FL*X builds on Pocsag, so operators can use much of their existing networks. Ermes is completely new, and far more expensive to install. Its pagers cost more to make, even though competition has held prices down in Europe.

Europe-wide coverage for Ermes is still some way off. Due to worries about interference, there is no coverage in the UK or Germany, Europe's largest markets for telecommunications.

As Europe waits, worldwide momentum is building up behind FL*X. "FL*X is the de facto global standard," says Chris Bullock, Motorola's European marketing director. "There are over 120 countries with networks being built with FL*X." As well as the United States, FL*X is used in China and Japan, although the networks are not 100 per cent compatible. Much of the developing world also backs FL*X.

This poses problems for Ermes's supporters. In paging terms, Europe is distinctly small beer. Of the 120 million pagers in use worldwide, just 6 million are in Europe. Ermes is an even smaller percentage. According to figures from the French Ermes operator Infomobile, the market there stands at 665,000 subscribers. By the end of the year, that could rise to 2 million. "France is expected to double this year," says Bob Rogers, Infomobile's chairman.

Even in France, Ermes's largest market, not everyone backs the system. The country's dominant operator, France Telecom, is sceptical. "We are not really in favour of Ermes," admits Julian Billot, chief financial officer of the company's paging division, FTMR. Ermes, he says, was developed as a high-cost, high- specification product for professional users and an Ermes network costs three times as much to install as a Pocsag system.

FTMR is unsure that the demand is there to justify the costs. Predicting the true market for Ermes is difficult, as roaming is not active yet.

The system's true test will come when networks operate in Germany and the UK. This is unlikely before the end of this year. Meanwhile, pressure will grow to allow FL*X into Europe; customers who need to roam will turn to GSM.

"Roaming for people in Europe is not a wish, but a dream of politicians," Billot says. "Ermes was built with a vision of the market that is a long way from the operators' views of the market. It was built by laboratories and regulators"n