MELBOURNE, Australia-Telstra Corp., Australia’s largest communications company, announced it is getting out of the paging business. It hopes to complete the sale to Link Telecommunications Pty. Ltd. by October, giving Link about a two-thirds share of the market. Telstra made its announcement on the day it went public with its plans to roll out a new digital mobile phone network.
Telstra’s decision to exit the paging market reaffirms paging is in serious decline in Australia. The decision also is important because Telstra for so long has prided its ability to be present in all areas of the communications market.
Paging has struggled to hold business in recent years as mobile telephony has exploded in Australia. In particular, the introduction of digital cellular networking, with its ability to transmit short text messages, has made the struggle to compete more difficult.
In Australia today, there are several million mobile phone users, compared with about 200,000 paging customers. This tells the story, and it is no coincidence that paging’s sphere of influence contracted as digital phone technology found popular appeal.
Telstra estimates the paging market has been declining about 10 percent a year for the past few years.
Telstra spokesman Greg van Mourik said the company didn’t foresee any change in the level of decline. “Paging has become very small and very specialized.”
Telstra had tried to improve its paging business through devising new pricing regimes, redesigning products and services, and reducing its operating costs, explained van Mourik. It had even considered the option of caller-pays paging.
For any organization, it’s not favorable to have one part of the business cannibalize another. Moreover, with the carrier keen on developing new technologies, Telstra saw little economic future in paging. In the wake of deregulation and its partial privatization, Telstra also has needed to be more accountable-more the hard-headed business operator.
The announcement doesn’t come altogether as a surprise. Late last year, the carrier refused to rule out that it might dump paging.
Link, for its part, has its core business in mobile messaging and call management and, according to the company, sees its acquisition as providing it “with the opportunity to significantly grow our business and focus on developing new mobile messaging solutions.”
Telstra’s decision to quit leaves only two players in the market: Link and Hutchison Telecommunications Pty. Ltd. The market was about evenly split among the three. And Hutchison, which purchased 800 MHz spectrum at the recent PCS (Personal Communications Services) auction, has its own plans to expand into cellular telephony.
