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Businessweek Archives

John Frazee: A Real Page Turner

In Business This Week: HEADLINER


Since taking the helm at Paging Network last August, CEO John Frazee has sent out the signal that the nation's No.1 beeper operator had to change course. Its cut-rate pricing has helped PageNet boost its pagers in service 54%, to 10.3 million, since December, 1995. But the company has yet to turn a profit. So on Feb. 9, Frazee said PageNet would slash 30% of its staff--or 1,800 jobs--for a first-quarter hit of $65 million to $80 million. Says Frazee: "High growth that's not profitable is not good for anyone."

The 53-year-old former Sprint president expects the layoffs to produce up to $55 million in annual savings. He also aims to have Paging Network sell higher-margin services such as sports scores, enabling them to charge more for pagers. Analysts applaud the changes.

Retraining a downsized marketing staff won't be easy, Frazee admits. "We're not naive enough to think that the transition won't present challenges." But he's hoping Paging Network can get more bucks from fewer beeps.By Roger Crockett EDITED BY KELLEY HOLLANDReturn to top


UNDER GROWING PRESSURE TO clean up the bottlenecks in the Gulf Coast region, Union Pacific Railroad announced on Feb. 11 that it will spend $570 million on facilities upgrades in Texas and Louisiana. It's also bringing in consultants to evaluate operations between El Paso and New Orleans. But some rivals are calling for more drastic measures. Burlington Northern Santa Fe is pursuing joint ownership of tracks between Houston and New Orleans and expanded access to some UP customers. "We have balked at that," says a UP spokesman. Both railroads are to meet with a shippers' group on Feb. 13 to discuss plans for ending shipping delays. BNSF has threatened to ask the federal Surface Transportation Board--overseeing UP's troubled merger with Southern Pacific Rail Corp.--to consider dismantling part of the combo.EDITED BY KELLEY HOLLANDReturn to top


ROADBLOCK: SENATE FOREIGN Relations Committee Chairman Jesse Helms (R-N.C.) on Feb. 10 warned the Clinton Administration he'll block new funding for the International Monetary Fund until the IMF lets Congress examine the fund's finances--and until the Administration accepts language barring U.S. contributions to any overseas family-planning organizations that provide abortions or abortion counseling. Secretary of State Madeleine Albright testified Feb. 10 that she would urge a meeting with the President to resolve the standoff.EDITED BY KELLEY HOLLANDReturn to top


READY FOR MORE TELEMARKETING? On Feb. 11, CENDANT, the direct marketing and franchise giant, struck a deal with Ticketmaster Group. Callers to Ticketmaster will be given the option of being transferred to a Cendant operator, who will then pitch them on services such as membership in the Shoppers Advantage discount club. Annoying? Perhaps. But Cendant has had success with a similar deal in the past: A program aimed at customers making reservations at the company's hotels was effective in selling memberships in discount buying clubs.EDITED BY KELLEY HOLLANDReturn to top

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