TSR Wireless L.L.C., the nation’s largest privately held paging carrier, filed for Chapter 7 bankruptcy late Friday afternoon in the U.S. Bankruptcy Court for the District of New Jersey in Newark.
Chapter 7 bankruptcy is the most severe type of bankruptcy, which calls for the liquidation of all of TSR Wireless’ assets.
The attorney and trustee listed on the bankruptcy filing were unavailable for comment late Friday.
The company has not made any kind of public statement-from a conference call to a press release-since it closed its doors Dec. 4, leaving its 1,700 employees, 2.6 million customers and paging resellers, retailers and carriers across the nation wondering what happened.
Phones at TSR Wireless’ headquarters in Fort Lee, N.J., have gone unanswered since then, and the company’s 275-plus retail stores across the country remain unstaffed.
The only word from the paging company last week came from its toll-free medical, municipal and on-call emergency number, which had this prerecorded message playing: “You have reached TSR Wireless’ emergency line. Unfortunately, TSR is now closed and has gone out of business. They have claimed bankruptcy and this line is no longer of service.”
Rumors about the company’s closure were plentiful last week, and many claimed it would file for Chapter 7. One persistent rumor-pushed by a variety of former TSR Wireless employees and paging retailers and resellers-was that Metrocall Inc., the nation’s second-largest paging carrier, had plans to buy TSR Wireless.
Mike Scanlon, Metrocall’s senior vice president for marketing and communications, said, “At some point in the past we took a general look at the company (TSR Wireless) and we chose not to pursue it any further.”
Scanlon would not say when Metrocall considered TSR Wireless or what actions, such as a merger or acquisition, the company had considered.
The company’s shutdown and subsequent filing for bankruptcy took its employees by complete surprise.
Christina Antes is a paging programmer who worked in TSR Wireless’ office in Aston, Pa., for close to two years.
“We all just came in like it was a normal Monday morning,” she said.
That normal morning quickly turned surreal when Antes’ manager gathered the office’s 40-plus employees gave them the news-the company was bankrupt, everyone was out of a job and they needed to pack up and be gone by 5 p.m. that evening.
“We were all really in a state of shock,” she said.
Antes said the only word from the company’s executives came in a less-then-sympathetic e-mail addressed, “To all employees:
“You are hereby terminated as an employee of TSR Wireless as of 5 p.m. on Dec. 4, 2000. TSR Wireless is stopping all operation effective close of business today.”
Antes said she and her two roommates, who also worked at TSR, were forced to file for unemployment and start looking for a new job.
Another TSR Wireless employee, Eric Sue, worked in sales at a company office in Los Angeles, and said he also will start looking for a new job. Sue said TSR Wireless employees in his office were also shocked by the news Monday morning, but that shock quickly turned to anger.
“Everybody just started taking whatever they could,” he said. “Whatever they could grab, they just went off.
“It felt like the stock market crashed.”
As news of the shutdown made its way from TSR Wireless employees to paging retailers, resellers and other paging carriers, the situation became much more immediate, and more desperate. According to a variety of sources in the retail paging industry, TSR Wireless’ network would shut down by 5 p.m. Dec. 8-disconnecting paging service for all of the company’s 2.6 million customers.
“It would have been far better for TSR to have arranged something” for its customers, said Elliott Hamilton, director of the global wireless group at The Strategis Group. “It just gives the industry a black eye.”
A network shutdown is especially hard on the paging resellers and retailers that rely on TSR Wireless’ network. Customers who have their service canceled will have to have their pagers manually reset to a new carrier’s frequency, or “re-freq’ed,” and many in the industry expect TSR Wireless’ customers will just buy a mobile phone instead of getting a new pager.
“A large part of our business is paging,” said Ken Hoffman, an employee at paging retailer EZ Money in Bethlehem, Pa. “I’m worried about my business as a whole.”
Directpage, a paging reseller in Vineland, N.J., moved quickly Monday after hearing the news. By Tuesday the company had begun paging all of its 2,000 TSR Wireless customers with a toll-free, prerecorded number that said, in part, “You may be affected by the closure of TSR Wireless as TSR was a provider of paging service for many of our customers. … Your pager may be disconnected after 5 p.m on Friday, Dec. 8.”
Jack Uniglicht, an employee at Directpage, said the company first contacted its customers who rely on their pagers for work-such as doctors or flight attendants-and offered them a brand new pager. New pagers don’t have to be re-freq’ed, which cuts down on customers’ time and trouble.
But the rest of Directpage’s customers will have to have their pagers set to a new frequency if they want to keep their paging service. And re-freq’ing isn’t easy, Uniglicht said-he described the situation as a “blizzard.”
“It’s going to be a flood of pagers,” he said.
Directpage, like other paging resellers, offered its TSR Wireless customers the chance to get a new paging service for free, but the move might not be enough.
“People can’t keep their same numbers, and that’s really distressing to some people,” Uniglicht said.
Paging resellers aren’t the only ones looking to salvage what’s left of TSR Wireless’ former customers. Metrocall’s Scanlon said the company is mobilizing-much like an army-to gather as many of TSR Wireless’ old customers as it can.
“We are trying to accommodate each and every one of them,” he said.
And Metrocall’s major draw, Scanlon said, is its two-way messaging service-a service TSR Wireless did not provide.
“We’re sittin’ rich with two-way units,” Scanlon said.
So far, he said, “hundreds of thousands” of TSR Wireless customers were in the process of switching over to Metrocall’s system.
In addition to TSR Wireless’ customers, Metrocall is also looking at the company’s former employees. Scanlon said Metrocall received close to 90 resumes from former TSR Wireless employees, and the company plans to hire about 22 of those workers.
TSR Wireless’ filing comes after a string of shakeups within the paging industry. The Arch Communications Group Inc.-Paging Network Inc. merger was completed just last month, which created-by far-the largest paging carrier in the nation.
Just a few years ago, no one would have thought the nation’s fourth-largest paging carrier would file for bankruptcy. In May 1996, TSR Wireless, under the name TSR Paging, filed for an initial public offering, according to documents filed with the Securities and Exchange Commission. The company’s stocks would have opened at $16 to $18 a share-a far cry from the stock prices of paging carriers today-but in January 1997, the company withdrew its application.
The reason TSR Wireless went under, many agree, was it didn’t have the technology to keep up in the paging race.
The Strategis Group’s Hamilton said the carrier just couldn’t carry its own weight.
“The did have an extensive retail operation,” he said. “The retail stores were just being a drag. It’s indicative of the whole paging industry in general.”
John Beletic, WebLink Wireless Inc.’s chairman and chief executive officer, said TSR Wireless-with its anachronistic traditional paging network-couldn’t stand up to the indust
ry’s merger mania.
“I think (TSR Wireless’ closure) is a result of a shakeout in the industry that is largely over now,” he said. “I think the industry has sho
ok itself down to three players, which is an appropriate number for an industry.
“We are now getting back to a more normal environment.”
That normal environment brings with it more stable pricing plans-WebLink will increase its paging prices to bring them more in line with the industry’s actual costs.
However, Hamilton doesn’t see TSR Wireless’ end as the last of the big moves in the paging industry.
“I think it still has to go through more shakedowns,” he said. “There’s still too many paging carriers out there.”
