Arch Wireless, PageNet Prepare For Nov. Merger

Staff On Nov 6 2000 - 8:00am

WESTBOROUGH, MASS. -Arch Wireless (formerly Arch Communications Group) will continue to grow its two-way messaging business through indirect retail channels even after its planned merger with PageNet is completed, an Arch spokesman said.

The combined entity, nonetheless, will concentrate more on direct sales to businesses than PageNet did, he pointed out.

The proposed merger with PageNet is expected to close in early November now that a bankruptcy court has approved it, Arch's spokesman said. The combined company will have about 14 million subscribers, or more than twice that of Metrocall, its nearest competitor, he noted.

"Our goal is to focus on direct sales because you're closer to your customers," the Arch spokesman said.

About 75 percent of Arch's business is direct to business, with the remainder from indirect channels, mostly resellers, he said. PageNet's split is about fifty-fifty, with most of the indirect business likewise flowing through resellers.

"You're likely to see the traditional reseller distribution channel decline over time, although strategic resellers [such as AOL] might increase over time," he added.

As part of its direct-sales focus, Arch will "probably modify its approach" to its owned-and-operated stores, which are in heavily traveled strip centers but also function as local sales offices for small-business accounts. "It's possible we'll use them more as business offices," he said. PageNet also operates storefronts that it has used mainly to support direct sales.

Even though Arch's "goal is to focus on direct sales," the spokesman said, the carrier in recent weeks signed up additional major national retailers-including Circuit City, Lowe's and Service Merchandise-to sell its two-way messaging service. "This year we've accelerated our retail two-way rollout," he added.

Other retailers carrying the Webster 100 two-way service are American TV, BJ's Wholesale Club, Boscov's, Electronics Express, Nebraska Furniture Mart, Pilot Truck Stops, Shopko and Spiegel. Most signed up for Webster this year.

All of Arch's two-way accounts also sell Arch one-way service, except for Circuit City, which markets one-way service from reseller Positive Communications. Arch also sells one-way service through Fingerhut.

PageNet doesn't market one-way service directly to retailers but depends on resellers such as Positive Communications, which sells one-way service from PageNet, Arch and Metrocall to Circuit City, Ward, Fred Meier and about 200 Staples stores, according to Positive.