It was time for a quick business decision calling for the latest in high-tech telecommunications.
The junior salesman for Burbank, Calif.-based software manufacturer Southwest Data Systems was ready to close a deal with a California apparel maker. But the company's president refused to buy until he knew whether Southwest could make a series of extremely specific modifications to its product.
The salesman didn't think the changes posed any difficulty, but national products manager J.R. Rodeffer, the executive with the authority to give an official okay, was meeting with another client 300 miles away.
Ordinarily, the answer to the apparel maker's inquiry might have been, "Give me a couple of days to get back to you," and the contract might have gone to a competitor. But several months earlier, Rodeffer had taken to toting a beeper that made it possible to contact him in almost any major U.S. city.
The salesman dialed a toll-free number and, guided by a computer-synthesized voice, relayed a message via satellite to Rodeffer in San Francisco. Within minutes Rodeffer was on the phone, and the client had his reply: "No problem."
The humble pocket beeper, once primarily used to summon doctors and tradesmen, is about to become the power tool of choice for business people who travel frequently, according to experts in the telecommunications industry.
Traditionally, those who carried beepers could only be reached within a limited area. But thanks to recent changes in technology and federal regulatory policy, several telecommunications firms are developing networks that will enable customers to transmit paging messages to metropolitan areas across the nation.
"This means new freedom for people who travel frequently," says Richard Nemerson, marketing vice president for National Satellite Paging Inc., a Washington-based firm that this month began soliciting customers for its coast-to-coast service.
National Satellite has constructed a chain of transmitting towers in more than 50 U.S. metropolitan areas. Messages are processed by a central computer in the company's downtown Washington headquarters and relayed to a satellite transmitter in California. The signals are retransmitted from a Westar satellite to receiving stations across the country. Those stations, located in metropolitan areas, send out the message to beepers over a common radio frequency.
"The lack of a means for contacting people instantly anywhere was the missing link that has kept all other telecommunications elements from realizing their full potential," says Larry Anderson, marketing director for Metrocast, a San Diego firm whose paging network became operational July 6. "A pager that travels is really exciting."
Clifford Bean, a telecommunications consultant at Arthur D. Little Inc., estimates that by 1991, the market for intercity paging may grow to 15 percent of the anticipated 10 million users of pagers and achieve total sales of almost $1 billion annually.
Front-runners in this new segment of the telecommunications market have targeted business people, lawyers, journalists and airline employes as their most promising potential clients. In advertisements in airline magazines, they stress higher productivity and lower telephone bills as key selling points for the services, which cost between $40 to $60 per month.
Michael Svensson, telecommunications director for the New York investment brokerage of Morgan Stanley, says coast-to-coast beepers are perfect for his firm's mergers and acquisitions team.
"Timing is everything in M&A," he said. "If these things help us close only one deal that we might otherwise have missed, they pay for themselves for the next five years."
Morgan Stanley recently purchased 20 National Satellite pagers and plans to obtain another 40 units soon.
"Everybody in investment banking is going to have these things before long," Svensson said. "I can't see how you'd be able to stay competitive without them."
The list of customers eager for nationwide paging services probably extends well beyond orthodox marketing categories. Cue National Paging of Costa Mesa, Calif., which started operations last year, counts mainstream Fortune 500 firms like Phillip Morris, Continental Airlines, and Wang Laboratories among its major clients, but it also serves a talent agency for Hollywood stunt actors, a company specializing in the construction of auto race tracks and outdoor arenas, and a prominent southern California funeral home, according to Gregory Flowers, president of First Continental Communications, Cue's largest distributor.
Odis Dow, president of Tank Sandblasting and Painting Inc. in Fort Worth, says his company's phone bill is down 50 percent since he began using a Cue pager 10 months ago.
"It's put a stop to all those expensive collect calls from my crewmen, and it means I don't have to leave them on hold while I look through my files."
Dow, whose company refurbishes potable water tanks in Texas, Oklahoma and Kansas, says the pager has increased his ability to respond directly to customer needs. "If a customer that's all hot and bothered about something just has to speak to the boss, they can get a hold of me. Doesn't matter if I'm in the lumber yard or the engineers' office or driving into town. This way, I get to make the important decisions."
The new technology has helped some users save more than just time and money. Doctors for David Chinn, a renal dialysis patient, used his beeper to notify him they had located a donated kidney compatible with his rare blood type.
Chinn, the president of an Indianapolis publishing company, had just opened a sales meeting in San Francisco when he received a special emergency signal on his beeper. Doctors told him that a transplant was impossible unless he could make it back to Indianapolis within five hours. Chin caught a commercial flight to St. Louis, chartered a plane from there to Indianapolis, and arrived at the hospital with only minutes to spare.
"Without the pager, I never would have made it," said Chinn, adding that he might have had to wait years for another kidney to become available.
Metrocast is the only nationwide paging service currently offering its customers the option of transmitting alphabetic characters as well as numbers, but other firms say they plan to bring similar technology online within the next several years.
"We think alpha-numeric capacity is critical for the growth of the market," says Metrocast's Anderson. "Phone numbers alone just don't provide users with enough information. Suppose you're a sales rep dealing with dozens of different buyers in the same city -- how are you going to be able to recognize who's calling you?"
Metrocast beepers are capable of receiving messages of up to 52 alphabetic characters, and Anderson says longer messages will be possible in the near future.
Sending alpha-numeric messages is complicated because, unlike numerical messages which can be entered simply using a touch-tone phone, the transmission of letter characters requires bulky terminals or operator intervention. Moreover, the two largest manufacturers of pocket beepers -- Motorola and Japan's NEC -- have thus far shown little interest in producing pages with alpha-numeric capacity.
Analysts predict that the range of the paging services will soon transcend even national borders. Metrocast has negotiated agreements with British Telecom in the United Kingdom and Scott Page of Canada and plans to extend its services to those countries within a year.
Other firms are working on technology that will enable them to market nationwide paging services to a broader consumer market. AT&E Corp. of San Francisco hopes to bring the cost of nationwide paging down to $8 to $12 per month, according to Dennis Waters, publisher of a newsletter for the FM subchannel broadcasting industry. AT&E has raised more than $35 million in capital on the New York Stock Exchange and, together with Japan's Seiko Corp., recently obtained a patent for technology that will allow production of pagers small enough to be worn on the user's wrist, Waters said.
The technology used in building nationwide paging networks varies from company to company, but all forms require substantial financial backing. Of the three firms to win FCC permission to use special nationwide paging frequencies, only National Satellite has kept to its original growth timetable.
The firm, controlled by Mississippi telecommunications giant Mobile Communications Corp. of America, will likely spend another $15 million to follow through with plans to double the number of cities covered in its network, according to Nemerson.
A second FCC winner, Contemporary Communications Group of New Rochelle, N.Y., is operational in only 16 cities. The third FCC winner is no longer in business.
In contrast, Cue does not use the special FCC frequency. It has chosen to broadcast messages to clients' pagers using FM radio subchannels rather than its own transmitters. That strategy is less capital-intensive and has enabled the firm to achieve coverage of 90 percent of the U.S. population in little more than a year, but some industry analysts say the quality of subchannel transmission is not always reliable.
Cue is backed by Nokia-Mobira Oy, one of Finland's largest private corporations, according to Flowers.
Metrocast, an equity partnership controlled by billionaire John Kluge's Metromedia Co., has built its network by stitching together an alliance of local paging companies in the nation's major metropolitan areas. That strategy might have been impossible a few years ago because local paging services operated on different frequencies, and individual beepers could only be tuned to a single frequency. Metrocast researchers overcame that problem by developing and patenting a technology that enables pagers to scan the airwaves until the message addressed to them can be located.
A handful of smaller firms are also struggling for a toehold in the nationwide paging market, but analysts say the odds are heavily weighted in favor of well-capitalized entrants.
"Ten years ago, almost all the players the paging business were mom and pop operations," said Stroup. "The entry of big outfits like Metromedia bring a whole new level of sophistication to the industry."