Dear Editor:
Your Dec. 11 piece, “TSR closes operations,” was interesting in light of what appears to be a total lack of information from actual TSR management. As a former 24-year employee at TSR, I would like to make some comments about the article.
For Metrocall to say they were taking a “general look” at TSR was a serious understatement. During a conference call at 8 p.m. on Sunday Dec. 3, when the senior management of TSR was being informed of the closing of the doors, Metrocall interrupted the call to make a last-ditch effort to do a deal. Of great concern to Metrocall was what TSR’s failure would mean to the struggling industry as a whole, not just making the deal to buy TSR.
Most of those affected know that TSR was very customer-oriented. The lack of information from the company in the days after the closing did the most damage. The systems are still up and running. The hysteria that followed was a great opportunity for the other carriers to create doomsday scenarios and grab the customers by making them think the systems were being shut down. And create they did!
I also loved the part about Metrocall’s major draw being its two-way messaging service, “a service that TSR Wireless did not provide.” Since TSR was not public, little was known about the fact that TSR had the most advanced connection to Weblink, which enabled TSR to connect all its switches together with Weblink. TSR had all of its switches two-way-capable except in three very small markets. TSR customers that wanted to upgrade to two-way did not have to change their phone numbers. The lack of operating cash for buying subscriber devices prevented TSR from taking advantage of its technology.
Regardless of how you spin the situation, the one-way and two-way messaging industry is on shaky ground. Maybe the reason the deal with Metrocall fell through was that the banks weren’t going accept any more risk. The days of insane financing have come to an end. To say to investors that two-way messaging is going to make all the problems go away is less than honest.
Arty Beahm
Former Executive Vice President of Network Operations and Engineering
TSR Wireless L.L.C.
Dear Editor:
In your article on its bankruptcy, you state that TSR delivered a termination e-mail to 1,700 employees that was “less-than-sympathetic.”
The cruelty of Chris Boyer’s cartoon makes TSR’s e-mail look like it was penned by Billy Graham.
Ed Legum
President
The Edmond-Howard Network
Dear Editor:
It was with great anticipation that I awaited RCR’s article describing the demise of TSR Wireless. Like others in the industry, I wanted to hear all the dirt and gossip, but I also expected a more thoughtful analysis of why TSR failed. I realize that as a privately held company, there is little public information about TSR’s financial operations, but I’m sure that a little diligent snooping could have uncovered a lot more information than was included in your article.
For about five years, TSR has been a formidable competitor in the wholesale sales channel, that is, selling equipment and airtime to resellers. While PageNet was stumbling about with their upgrade to FLEX, periodically shutting down their system while they brought new transmitters on line, TSR rolled out their FLEX system without disrupting their customers. They did it right. They didn’t overload the system. Their channel covered the Los Angeles area completely, without holes. Their prices to resellers were ridiculously low, both for equipment, and for airtime. Their service was excellent. They paid their salesmen top commissions. In reseller after reseller, they began to take over more and more of the activations. One reseller who had used our company heavily from their establishment, began to fade with us, while building to about 14,000 customers through TSR. TSR was giving them pagers for about $20 – $25 below the lowest price we could find, and giving them airtime for as little as a buck a month. We competed as best we could, but, needless to say, it was hard.
The picture that now is emerging is that of a company that spent money profligately on quality, offered service at any price to secure market share, and used its size and growth history to garner credit from its suppliers.
I beg to differ with John Beletic, who feels that TSR’s failure is the result of an industry shakeout. To me it is obvious that the TSR bankruptcy is a case study in bad management, or at least in over-exuberant management. Once TSR failed to tap into the investor gravy train that kept PageNet afloat for 18 years, that is when they withdrew their application for an IPO, they needed to rewrite their business plan in a more conservative light. Instead they forged ahead with their system upgrade, sinking hundreds of millions of dollars into FLEX technology and equipment. In order to have any prayer of loading enough customers onto the system to have it pay for itself, they were forced to lower their rates and compete with PageNet, which was busily pursuing its own road to bankruptcy; as well as the other predatory paging carriers out there, like SmartBeep, PageMart, etc. Essentially, TSR is another victim of the Motorola/PageNet seduction of the paging industry to FLEX, REFLEX and (remember) INFLEXION. These are hugely expensive systems to set up and maintain, requiring large marketing budgets to load customers and counteract churn. Equipment and airtime rates have to be realistic in order to support the system. Until paging carriers realize this, we can expect more failures.
The most incisive quotes in your article come from The Strategis Group’s Elliott Hamilton, who indicates that TSR could have managed its shutdown more professionally and gracefully. It had a good name in the industry, which was completely squandered by its chaotic exit. Hamilton also points out that its retail operations had begun to drag down the company. If so, why wasn’t it shut down long before? Both of these comments point to a management that wasn’t paying attention.
We’ll pick up a few hundred customers, maybe a couple of thousand, from TSR’s implosion. Others will pick up more. We’ll all try to make them happy. But if we continue to try to attract them with cut rates, we’ll get to go through this all over again.
Sincerely,
Charles A. Franklin
President
RadioCall Acquisitions L.L.C.
