[GreenKeys] Western Union

[WA3FRP at aol.com]

The microwave system was a backbone support vehicle for any number of  
services that WU provided.
 
These services, such as Telex, TWX, Private Wire, Voice Services, GSA,  
Hotline, and AUTODIN, absolutely filled the microwave system. The microwave  system 
was constantly being updated, expanded and improved.  Even with  this, WU was 
purchasing services from AT&T using TELPAC for spot situations  when route 
capacity was temporarily filled.
 
One of the many problems that killed WU wasn't the lack of exploitation of  
their microwave system that joined city to city but the lack of facilities that 
 ran from the WU offices to customer locations.  It was too expensive to  
duplicate the Telco circuits in places other than the inner city.   And, business 
were moving to the suburbs where the business density was too low  to do 
anything but lease facilities from Telco. As Telco raised rates local loop  rates, 
WU built concentrator locations that served 10 to 50 customers within a  
serving wire center using TDM technology built by Databit from Long  Island.  
While this eliminated up to 50 long local loops from the WU  central office, the 
design still required up to 50 short local loops from the  unmanned 
concentrator site, usually co-located in a telephone answering service  that had excess 
local loop capacity (so that WU didn't have to pay construction  costs to 
Telco).  This concentrator solution usually had a payback in 12 to  18 months and 
was successful but it only delayed the inevitable.  There  were still (shorter) 
local loops that continued to increase in price. As a  result, WU had to 
raise its prices to maintain its margins.  This led to  erosion in the customer 
base and the demise of a number of WU services. At the  same time, FAX 
technology evolved to a point that it totally cannibalized both  Telex and TWX.  WU 
countered with its EasyLink system -- a very early  e-mail system -- but most 
customers did not yet have computers and a FAX machine  was a better fit for many 
businesses.  
 
A case could be made that WU had the wrong mix of services that used the  
backbone microwave network and that WU should have offered voice services  
earlier and more aggressively and stayed in the FAX business rather than  abandoning 
it.
 
WU did use its WESTAR satellite system for TV distribution but that  business 
was already pretty much locked up by AT&T.  The TV networks  were happy with 
AT&T and the reliability of its existing service provider  seemed to outweigh 
the risks of transferring much of that business to an  alternate carrier even 
if the price were lower.
 
In summary, the microwave system was not underutilized.  There were  other 
issues that killed WU.  
 
And now, WU is about to be spun off by First Data.  So, once again WU  will 
live as a separate company.