RadioCall Service and Systems Inc. is a small California paging company too small to be acquired, but big enough to survive-and even thrive-in a messaging market dominated by a few big players.
Core one-way paging is the focus of RadioCall. The company’s recipe for success is not value-added features or state-of-the-art technology, but providing traditional paging services.
A full-time staff of 16 runs the business. RadioCall operates networks in the medical and public access frequency bands covering most of southern California, a highly competitive region that might be attractive to an expanding megacarrier. But with only 10,000 units in service, RadioCall is not a likely acquisition target, said President Charles Franklin.
“There are resellers with 15,000 units in service,” he pointed out.
Just a few years ago, RadioCall faced the prospect of closing its doors. Parent company Advanced Electronics Inc. hired Franklin in April 1995 as RadioCall’s general manager with a condition to be named president. “The agreement was that if I was able to turn the company around, I would assume that title,” said Franklin.
He did.
More than a decade ago, RadioCall founder Bob Mohr, Ed Konjoyan of Radio Dispatch and Harry Brock, then of Metrocall Inc., formed a joint entity called PageKom to purchase and operate the paging system Motorola Inc. built specifically for the 1984 Olympics in Los Angeles.
By the fall of 1995, RadioCall was being drained financially by paying the bulk of operating costs on the PageKom network. It had 4,000 pagers on the system, while Radio Dispatch had fewer than 1,000 and Metrocall only 300, said Franklin. Since costs were divided proportionally to usage, “It made a great deal of sense to buy out the system,” he continued.
“The purchase of the paging backbone afforded RadioCall Service & Systems Inc. the opportunity to `lock in’ a flat-rate fee to use the system rather than to pay a set fee per pager,” said Franklin.
Advanced Electronics almost doubled RadioCall’s coverage by acquiring and constructing additional licenses. Franklin pushed for growth in the reseller channel to increase revenue. Since February 1995, RadioCall has seen a sixfold increase in resellers to total 54 last month, which includes the assets of PageKom. RadioCall’s direct sales account for between 35 percent and 40 percent of its distribution and resellers are responsible for the rest.
RadioCall’s public access frequency offers several advantages. Unlike other paging frequencies, RadioCall is not required to share its licensed bandwidth with other carriers. Compared with 900 MHz, the 152 MHz public access channel requires fewer transmitters, said Franklin, which means lower system costs.
Franklin’s goal for profitability is to break even on pager sales, and make a profit on service fees. In contrast, many carriers take a loss on subscriber equipment to attract more customers and profitability comes with volume over the long term. A carrier like RadioCall doesn’t have the capacity for such a strategy.
