The most recent consolidation among larger paging carriers was completed last month, when TSR Paging Inc. and American Paging Inc. combined into TSR Wireless Inc.

With the financial and regulatory aspects of the transaction behind them, TSR Wireless President Mitchell Sacks and his executive crew now face the real work of a merger-integration. While mergers are considered good for the industry in general, a less-than-smooth integration can spell disaster for a company-witness the problems MobileMedia Corp. faced while consolidating MobileComm, and the result.

Sacks said his goal is to erase any distinction between a TSR office and a former API one so that in six months, no one can tell the difference. But he faces several challenges. First is that API was a publicly held company and TSR is a private one. Former API employees will notice a different style of management and executive culture at a private company. Sacks said API employees seem to be handling that transition well.

“It’s gone a lot better than we had expected,” he said. “People seem to be adjusting pretty quickly.”

Defining the company’s management style as employee-driven, Sacks added that TSR management strives to maintain close contact with employees at the local level. Sacks himself has visited all but three former API offices, and his director of sales, Frank Lynch, has visited them all.

“We’re really making an effort to communicate information to them, whether it’s good or bad,” Sacks said, acknowledging the anxiety that most employees experience when their company is acquired.

TSR laid off 85 API employees in all, mostly in upper-level executive positions. Sacks said he filled those 85 positions with TSR personnel or promoted from within the API organization. “We have basically grown our own executive talent internally,” he said. “I found there were a lot of really excellent people on every level of the organization.”

TSR is reviewing every API account to determine the profitability of each. Those that make a good profit will be left intact, whereas those that are not will be renegotiated. Sacks said the company has reviewed 85 percent to 90 percent of the large- to medium-sized accounts.

“TSR is more focused on creating operating cash flow and financial value,” Sacks said. “There was a lot of focus in the previous organization on subscriber numbers.”

Next on the agenda is to fuse the two companies’ billing methods.

“The biggest part of any integration is the billing system, which is where we’re spending a lot of time and effort,” Sacks said.

API used its own billing system called PBMS. TSR will do away with that system and switch each office over to the billing system TSR bought from InTouch. Sacks said he wants the billing conversion to proceed slowly, one system at a time, to avoid the problems MobileMedia experienced with MobileComm.

TSR will begin converting systems in markets where the two companies have an overlapping presence. Arizona, where TSR has a strong billing system in place, will be first.

“It reduces the risk. If we have a problem, it’s confined to a small customer base,” he said, adding that the strategy minimizes the effect of any possible billing inconsistencies.

TSR gained footprint in several markets as a result of the acquisition. The company now has a presence in areas of Florida, Minnesota, Missouri, Oklahoma, Utah and Virginia. Converting customers in markets where the two carriers overlap, will be a big effort. In Arizona, for instance, API had a 150 MHz system whereas TSR has a 900 MHz network. But because there is a market for a lower-tier, 150 MHz system there, TSR has no plans to convert those customers.

However, in the Washington D.C./Baltimore market, API has several systems, including 900 MHz, 150 MHz and 450 MHz. Sacks said he plans to marry the two 900 MHz systems, migrate customers from the lower frequency networks to them and remove the sites no longer used.

Besides new markets, Sacks said the API merger brings to TSR a strong direct distribution channel to corporate accounts, something that TSR lacked. “That’s something we’re going to try to learn from,” he said. “They built some good, strong relationships with some big corporations.”

According to Sacks, TSR focused on the reseller distribution channel, a strategy he said will continue, despite the fact that many paging carriers are rethinking their reseller strategy.

“I’d like to believe that we will capture a higher-percent share (of the reseller base) because we give better customer service,” he said.

Finally, should this integration proceed as hoped, Sacks stated that the company would continue with its acquisition strategy to further establish TSR as a major paging player.

“If we can add acquisitions that make sense on a standpoint of complementary distribution channels or (footprint) and don’t have to overpay for it … we’re definitely interested,” he said.


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