Proving all pundits wrong, the paging industry plunged into a deep crisis last year, posting a negative growth in the subscriber base in cities. In the 27 cities licence earlier the subscriber base dropped from 8.33 lakh subscribers in March 1998 to 6.70 lakh subscribers as on 31 March 1999. However, the begining of services in circles compensated for the drop. The total base in the country still manage to reach 8 lakh.

• The reasons for the dismal show of the industry were many. First, the paging industry opted not to give any subsidy or to go for any bundling, resulting in the end user paying full money for pagers. This resulted in poor penetration rate. Two, the general economic slowdown also affected the paging industry. It was not a good time for market development. Three, there was confusion among users about the utility of pagers and the future of the paging industry. Here the challenges were from the cellular companies. Four, the industry could not succeed in segmenting the market clearly and positioning against the hot ones. Most of the growth in subscriber base came from the low-income group and the "just employed" people. Five, barring a few companies, most of the paging companies did not take up value-added services seriously, thus resulting in the revenue from these services barely to 1.5 percent of the services revenue of the industry.
• In spite of this state of affair, the industry grew in 1998-99 to an estimated size of Rs 241 crore, registering a revenue growth of 20.5 percent. Major contributing factors to this growth were two. First, the spread of paging to circles. Two, there was no subsidy on the terminal-end equipment, against the practices in the previous years, thus increasing the sales turnover of every operator. In effect, it was a trend from zero cost to full cost for the end user.
• The contribution of paging in circles to the subscriber kit was around 1.30 lakh. The companies that deserve special mention are Punwire—Page Me—with its operations in 165 cities, and BPL with its spread in Karnataka, Kerala, and Tamil Nadu. However, as compared to the coverage—12 circles—the contribution of circles to the total subscriber base was scanty for Punwire as the company reports only 90,000 subscribers by the end of March 1999.
• The year set the beginning of surrendering licences due to the non-viability of projects. MaxPage was the trendsetter in this case, surrendering its licence in Punjab. There are reports that Usha Martin has also surrendered its licence for three cities.

Market Players

• DSS Mobile Communications (Mobilink) maintained its numero uno position both in revenue and subscriber base. The company posted a revenue of Rs 60.49 crore and a subscriber base of 1.65 lakh, a drop of about 0.61 lakh from March 1998.
• The EasyCall Group—there are four companies in the group—came to the second position with an estimated revenue of Rs 30 crore. Pagepoint is in the third position with an estimated turnover of Rs 26.40, to be followed by Punwire with Rs 26 crore (estimated) and RPG Paging with Rs 25 crore.
• RPG Paging was the only company that could reach profits at operational level in the paging industry. It has become the number one company in two—Delhi and Chennai—of the three cities it operates with around 80,000 subscribers. It is rallying behind DSS Mobile in the third city, Ahmedabad.
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