No i don’t think so… reducing the LA size will decrease the Paging load, and increase the amount of location updates. But the LU duration is about 3 or 4 seconds (AFAIK), and that’s already your average. Mathematically, it doesn’t make sense 🙂
Location Area should be as big as your Paging capacity allows.
Really, have a look cell per cell (what’s max MHT per cell ?) and split the sdcch cause. The location area is probably not the problem, that’s why I didn’t include it in my previous post.