Why So Many Are Going "Beep!"

By Alexander L. Taylor III

Pocket pagers and mobile phones could become ubiquitous

When Claire Grenewald, a Summit, N.J., high school sophomore, made a habit of staying out late with her steady boyfriend, her parents bought her a beeper. Whenever she is 15 minutes past her 11:30 p.m. curfew, her parents dial a telephone number that causes a tiny electronic device stashed in her purse to beep, reminding her that it is time to go home. The elder Grenewalds also take the beeper along on their frequent trips to New York City. Says Susan Grenewald: "The kids can just buzz us if anything important happens. It means we're all in touch as a family."

Like the Grenewalds, more and more Americans are using the air waves to stay in touch. Improved technology and falling prices have made such pagers or beepers cheaper and easier to use. In contrast to the unwieldy $340 versions of a decade ago, 1983 models slide into a pocket and cost less than $100. Manufacturers who once concentrated on serving business clients are now rushing to establish a beachhead in the consumer market.

At the same time, the pent-up demand for mobile telephones is about to explode. Prospective suppliers have been queuing up at the Federal Communications Commission to provide a novel service called cellular radio communication. Cellular systems, in which a city is divided into honeycomb-like cells, each with its own transmitter, get much more use out of a single radio frequency than conventional mobile phones. Cellular technology is such an improvement over existing techniques that it allows an almost limitless expansion in the number of mobile phones in use. It also increases their range and usefulness. Licenses have already been awarded in some of the largest U.S. cities.

These two methods of electronic communication are expected to complement, not compete against, each other. Both beeper and mobile-phone messages are carried on radio frequencies. The companies that operate on those frequencies, known as common carriers, often transmit both kinds of signals. Growing familiarity with cheaper beepers is expected to enhance the demand for mobile phones. Another radio-transmitted telephone service, cordless phones, which only have a range of up to 700 ft., got a boost from the Government last week when the FCC proposed to double the number of frequencies available for use.

Beepers seem destined to become the most popular portable electronic devices since the Sony Walkman. Apart from teenagers, who would just as soon not stay in touch with their parents, the potential market is huge. The Cambridge, Mass., consulting firm of Arthur D. Little, Inc. estimates that by 1990, 7 million beepers may be in use, compared with 2.5 million today. By the end of the decade, annual sales could reach $86 million and revenues from fees $2.8 billion.

The cheapest beeper to hit the market so far is Tandy Corp.'s $99.95 pocket pager. Smaller than a cigarette package, the pager can be activated merely by dialing a seven-digit number on an ordinary telephone. Like all beepers, it carries a monthly rental fee. Depending on the area, the cost will be about $4 to $8 a month, paid to the common carrier that transmits the signals; some carriers add a surcharge of 20-c- or so per beep. The pager was introduced in the Dallas-Fort Worth area last month, and should be available nationwide by the end of this year. Tandy expects to sell "a good deal more" than 50,000 in 1983.

For the past month, Metromedia Telecommunications, a division of the big television-and radio-station owner, has been blitzing the New York metropolitan area with an advertising campaign for its new rental beeper, fittingly named the Li'l Bugger. Suggests a newspaper ad: "Lose 'em, beep 'em--find 'em, keep 'em." The Li'l Bugger, which is powered by one A A 1.5-volt battery and has a range of 30 miles, rents for $39.95 a year with a $5-a-month broadcast fee and a 25-c- charge per call. Metromedia says it has been getting 1,250 inquiries a week about the product, which comes done up in a colored plastic case decorated with a smiling bee.

While this new wave of consumer beepers is designed for simplicity and durability, more complex and versatile models are on the way. Next week Radiofone Corp., a Metromedia subsidiary, will launch what it calls the world's first pen-shaped pager. It weighs 1.5 oz., costs about $365 and is small enough to be clipped on a shirt pocket. The unit runs on a mercury battery that gives off a warning tone when a new one is needed. In May, Radiofone will introduce a 5-oz., $500 beeper that is practically equivalent to a pocket secretary. It has a window for displaying transmitted information up to 80 characters in length and a computer memory that will store as many as four messages if the user is, for example, in a meeting. Both devices are made by Motorola, Inc., which also sells pagers under its own name.

Even in this technology-driven business, there is big money to be made by companies that merely rent beepers and by the common carriers that transmit the signals. The Li'l Bugger, for instance, costs Metromedia $150, but will generate $600 in income from rentals and broadcast charges over its six-year life.

The potential bonanza has lured some unusual entrants. National Public Radio is developing a nationwide paging system that will bounce signals off the same satellite it uses for radio programs. The extra charge for beeping coast to coast is estimated at $5 to $10 a month. Says NPR Executive Richard Hodgetts: "Look at the people who are frequent flyers. There are a lot of people on the go all the time." Metromedia and American Express Co. have joined in a four-company venture that will also offer nationwide paging. NPR's partner in satellite beeping, Mobile Communications Corp. of America, estimates that their venture will gross about $10 million annually in five years.

Mobile Communications is one of many common carriers that are also applying for cellular radio licenses. The FCC plans to designate two for each city. One of the two everywhere will be a telephone company. A big winner will be American Telephone & Telegraph Co., which pioneered in development of the new technology. AT&T is already serving 2,000 mobile-phone customers with a network covering some 2,100 sq. mi. in a pilot project in Chicago, where regular cellular service will begin in November. The company has been granted licenses to build systems in six other cities: Boston, Buffalo, New York, Philadelphia, Phoenix and Pittsburgh.

The potential market is enormous. Some 50,000 names are on waiting lists across the U.S. for the limited number of mobile phones that existing systems can handle. In New York City, for example, where New York Telephone Co. has only 700 mobile phones, the waiting time is ten years. By 1990, AT&T alone expects to construct systems in 35 cities and sign up 1.5 million customers. Telocator Network of America, the industry trade association, estimates that as many as 3 million mobile phones may be in use by 1990, up from 180,000 today. With rental fees and per-call charges averaging $125 a month, annual revenues could reach $5.4 billion.

At least initially, mobile phones will be too expensive for all but the best-heeled consumers. Mobile phones, generally installed in cars, will run from $1,500 to $2,500; completely portable ones are priced at $3,500 to $4,500. Monthly charges are expected to run from $150 to $180. But the cost will come down. Says Alan Reiter, editor of Telocator, a monthly magazine: "I think you're going to see people buying cellular phones instead of extensions within the next several years."

Maryland Hotel Developer Ralph Deckelbaum, 53, who has been using a portable phone on a trial basis for more than a year, says he is "tickled to death with it." But life has not been the same for his secretary of 22 years, Anna Belle Alderman. "It used to be that when he left, he was gone," she sighs. "Now he never leaves; he can talk to me every five minutes if he wants to. When he goes out on a construction job, he calls me while he's standing on one of the girders."

Some experts worry about the strain of staying in touch 24 hours a day. Marilyn Komechak, a Fort Worth psychologist who has clinically studied stress, believes that prolonged use of beepers produces anxiety and probably high blood pressure. "I have never seen anyone respond to a beep with a smile or a less than strident comment," she says.

Maybe so. But try to tell that to the parents of children who are patients of New Jersey Dentist Robert McGuire. When Junior gets in the chair, the parents are handed beepers so they can run errands, or stay out of the way, until the dentist is done. Or tell it to the Baltimore lawyer who makes telephone calls while driving to and from Annapolis, thus extending his billable hours. With the technology behind pagers and mobile telephones becoming increasingly available and inexpensive, the handy little devices promise--or is the word threaten?--to become ubiquitous.

--ByAlexanderL. Taylor III. Reported by Melissa August/Washington and Adam Zagorin/New York

With reporting by Melissa August/Washington, Adam Zagorin/New York This file is automatically generated by a robot program, so viewer discretion is required.