BOYNTON BEACH, Fla.—A potentially important deal between Motorola Inc. and Multitone Electronics has fallen through, Motorola confirmed, which leaves the paging and messaging landscape still more uncertain.
Last year Motorola announced it would exit the paging and messaging industry altogether, and would stop making its one- and two-way paging devices. Motorola is the only company that builds two-way paging devices for U.S. paging carriers.
In February, Motorola said it would transition its device-making business to United Kingdom-based Multitone. Under the deal, Multitone would take over the production of Motorola’s Advisor Elite and Advisor Gold one-way pagers and the Talkabout T900 and Timeport P935 two-way pagers. Multitone would not use the Motorola name, but would build essentially the same devices and would market them under the Advisor, T900 and P935 brands.
Negotiations between the two companies broke down about two weeks ago.
“Multitone wasn’t able to meet some of the deadlines that were in place,” said Motorola spokeswoman Josephine Posti.
Multitone approached Motorola shortly after the company said it would exit the paging and messaging business and offered to take over Motorola’s role in the industry, Posti said. But Motorola plans to completely shut down its business by the middle of this year—the last of the company’s paging and messaging employees will leave the company in September—and the deadline was too short for Multitone to set up a U.S. operation and take over Motorola’s business.
“We needed to complete the transaction with Multitone within a certain time frame,” Posti said.
Multitone declined to comment on the failed negotiations.
The deal between Motorola and Multitone was a potentially significant one for the nation’s struggling nationwide paging and messaging carriers.
Arch Wireless Inc., WebLink Wireless Inc., Metrocall Inc. and WorldCom’s SkyTel Communications Inc. all sell two-way messaging services, and the only two-way devices currently available are made by Motorola. Several other companies, including Hunetec Co. Ltd., PerComm Pager Inc. and Standard Telecom America Inc., have licensed Motorola’s ReFLEX two-way paging technology and plan to sell two-way devices, but it is unclear whether they will be able to fill Motorola’s place in the near future.
Further, Arch, WebLink and Metrocall have been suffering financially—WebLink and Arch have filed for Chapter 11 bankruptcy and Metrocall plans to next month—and they hope the two-way messaging business will counteract the dwindling market for one-way services.
Bob Lougee, Arch’s vice president of corporate communications and investor relations, said the failed deal between Multitone and Motorola is not cause for concern.
“We’re confident that one or more companies … will produce two-way devices,” he said. “Exactly when that will happen is difficult to forecast.”
Lougee said Arch expects two-way devices from Motorola ReFLEX licensees to be available by the end of this year or early next year.
—Mike Dano, RCR Wireless News