Perhaps the greatest indicator of the wireless data industry’s rise to popularity is the way paging carriers are positioning themselves in the space today.
Pioneering wireless data carriers like American Mobile Satellite Corp. and BellSouth Wireless Data L.P. started the trend by offering paging-like services aimed at business users in a bid to jump-start their lackluster vertical market businesses.
At the same time, paging carriers looked to add technology and applications historically associated with wireless data carriers to diversify beyond the slowing traditional paging delivery business. At the heart of this transformation is the gradual upgrade to two-way messaging networks.
The result is a blurring of the lines between messaging and wireless data. The poster child for this phenomenon is WebLink Wireless Inc., formerly PageMart.
According to John Beletic, WebLink chairman and chief executive officer, the company spent $500 million upgrading its network to two-way technology-$330 million in capital expenditures and another $170 million in losses during the transition.
Today, it receives its first two-way devices capable of operating on this network. In Beletic’s eyes, the future finally has become a reality.
“Wireless data is relevant because of the applications that apply,” he said. “On the human side, it will be wireless messaging-information on demand and message delivery, regardless of where the content resides. From the machine side, you have all these telemetry applications … that’s clearly wireless data.”
The company’s commitment to this new game plan was outlined in a letter to investors sent late last month.
“Virtually all of our development expenditures over the past two years have been to create the ability to provide wireless data connectivity for Internet appliance portable devices,” it read. “We have made investments in IP infrastructure, terminal equipment, content relationships, middleware software alliances, new distribution agreements, billing systems and telemetry interfaces.”
“We didn’t believe the world understood that we had $500 million invested in this new business,” explained Beletic. “We thought the world still felt we were a traditional paging company.”
Instead, the company has drawn new lines of competition, distancing WebLink from paging carriers Arch Communications Group Inc. and Paging Network Inc., which Beletic said still had a significant traditional paging business, while WebLink holds only 6 percent of that market.
“What we are most like today is AMSC and BSWD, and the advanced messaging side of SkyTel,” he explained. “I see us as a wireless data company. Wireless data is a category everybody is talking about now. Traditional paging is an industry in decline. Wireless data is an industry just being born.”
The company told investors it has internal projections that about 70 million of the people sending and receiving text messages will be using mobile phones in 2004.
“We believe another 30 million people will carry both a phone and a wireless data device and another 10 to 20 million will own wireless data devices only,” the letter continued. “All of the phone and data devices will be able to converse with each other regardless of service provider.”
Looking beyond this peer-to-peer, or instant messaging, model, WebLink expects to play a significant role in both horizontal and vertical business applications. Central to this goal has been its efforts to attract application service provider developer partners to its network.
“This whole ASP effort is an important initiative within the company to enrich the use of our services for our business customers,” Beletic said. “It is consistent with who we are and where we are going.”
Doug Glenn, vice president of corporate development at WebLink, leads the developer solutions initiative.
“The real driver of this has been the launch of two-way services,” he said. “Two-way enables wireless e-mail and instant messaging. The two-way capability allows mobile employees to link to the business process.” He called this enterprise application integration.
WebLink is hosting its first Enterprise Solutions Partner Program Developers and Sales Conference Feb. 7 in Dallas as part of that effort.
“The goal of the conference is to provide an opportunity for partners to meet with the company and its sales team and create solutions and strategies to penetrating the market,” Glenn said. “This is the first opportunity for all our partners to come together and talk about what they do.”
To date, WebLink has attracted such partners as JP Systems Inc., MobileSys Inc., TimeBills.com, 3SI Holdings Inc., eLoyalty and others. Many more are expected in coming months.
“It’s important that we don’t have solutions that are commoditized in the customer’s mind,” Glenn said. “The exciting thing we think will occur is that if you open the door up a little and create an atmosphere where people can be creative, you’ll have a lot of new things. We want to be a facilitator of that.”
Beletic said the switch to the WebLink brand has gone a long way in attracting these developer partners.
“We are finding already that the brand name WebLink Wireless is a very powerful one and assists us in winning and establishing new business,” he said.
Beletic said he hopes this wireless data role will expand further once more devices are introduced with wireless connectivity to its ReFLEX network. He said he expects two PDA manufacturers to release products with two-way ReFLEX capabilities sometime this year. He also expects a third manufacturer to begin making ReFLEX paging devices soon.
But Beletic has developed somewhat of a “show me” attitude toward devices, having been stung by the extended delay of ReFLEX 25 devices from Motorola Inc. and Glenayre Technologies Inc.
“I am overly conservative as to when I expect to see devices,” Beletic said. “We went through 10 months of carrying this network and waiting for devices. It cost us $2 million to $3 million every month while in an idle state … waiting.”
In the meantime, Wall Street has given its stamp of approval. The former PageMart stock was trading at $5.56 in late October, when it first announced the name change and strategic refocus. Since then, it has increased almost 350 percent-debuting at $8.93 after the name change on Dec. 1. and rising to a 52-week high of $19.12 in mid-January. WebLink shares closed at $18.38 at RCR press time.
