Excel Communications
Encyclopedia
Excel Communications was founded in 1988 by Dallas entrepreneur Kenny Troutt as a long distance reseller in the US telecom sector at the birth of telecom deregulation. It began selling franchises using a multi-level marketing
(MLM) business model, eventually selling over 200,000 of these franchises, or an average of 1 franchise for each 20 customers. In seven years, it became the fourth-largest long distance carrier in America and the youngest billion-dollar-annual company in history (8 years as compared to the second fastest growing, Microsoft
, which took 15 years).
On May 10, 1996, Excel became the youngest company ever to join the New York Stock Exchange
(NYSE), trading under the symbol (ECI). The ceremonial honor of ringing the opening bell was afforded to Kenny Troutt as the company he founded began its first day of public trading, with an offering of 11.5 million shares of common stock
. In June 1997, Excel acquired Telco Communications Group, one of the nation's 10 largest long-distance phone companies with its own nationwide fiber-optic network. Before the purchase, Excel had to resell long distance service through other companies networks, such as Frontier Communications. In November 1998, Excel merged with Teleglobe. Kenny Troutt retired as CEO on September 20, 1999 and was replaced by Christina Gold.
By 2002, Excel had entered the local phone service market more aggressively than smaller competitors such as MCI
's Neighborhood. The gross margins associated with long-distance telephone service dropped precipitously during the period from 1998 through 2003 due to the entry of numerous competitors and additional line capacity and the profitability of Excel and almost every other telecommunications firm dependent upon long-distance calling customer dropped precipitously.
At some point Excel/Teleglobe was taken over by Teleglobe's major share holder, Bell Canada
. Bell Canada then demoted Excel separately to a subsidiary and eventually spun it off to a private company, VarTec Communications, which required FTC approval to return to the private sector. After approval, VarTec continued the network marketing business model. On November 1, 2004, VarTec Communications (the parent corporation of Excel) unexpectedly filed for Chapter 11 bankruptcy protection. Excel sought to be released from its contracts with its independent representatives. This allowed it to continue to receive revenue from its large base of installed customers without paying eternal commissions to the franchisees. Excel continued to operate but ceased to be a multi-level marketing company. Although it created a lot of cash to pay creditors, it was seen as shortsighted by the franchisee association since it removed the main source of sales and customer loyalty.
In September 2005 the Federal Communications Commission
(FCC) approved the transfer of licenses to Comtel Telecom Assets, LLP and on June 12, 2006 the company emerged from bankruptcy
under its new ownership, announcing a return to a slightly revised version of its former name, Excel Telecom. On March 16, 2010, Matrix Business Technologies
announced it would acquire the customers and substantially all the assets of Comtel Telecom Assets, LLP.
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(MLM) business model, eventually selling over 200,000 of these franchises, or an average of 1 franchise for each 20 customers. In seven years, it became the fourth-largest long distance carrier in America and the youngest billion-dollar-annual company in history (8 years as compared to the second fastest growing, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, which took 15 years).
On May 10, 1996, Excel became the youngest company ever to join the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
(NYSE), trading under the symbol (ECI). The ceremonial honor of ringing the opening bell was afforded to Kenny Troutt as the company he founded began its first day of public trading, with an offering of 11.5 million shares of common stock
Common stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
. In June 1997, Excel acquired Telco Communications Group, one of the nation's 10 largest long-distance phone companies with its own nationwide fiber-optic network. Before the purchase, Excel had to resell long distance service through other companies networks, such as Frontier Communications. In November 1998, Excel merged with Teleglobe. Kenny Troutt retired as CEO on September 20, 1999 and was replaced by Christina Gold.
By 2002, Excel had entered the local phone service market more aggressively than smaller competitors such as MCI
MCI Inc.
MCI, Inc. is an American telecommunications subsidiary of Verizon Communications that is headquartered in Ashburn, Virginia...
's Neighborhood. The gross margins associated with long-distance telephone service dropped precipitously during the period from 1998 through 2003 due to the entry of numerous competitors and additional line capacity and the profitability of Excel and almost every other telecommunications firm dependent upon long-distance calling customer dropped precipitously.
At some point Excel/Teleglobe was taken over by Teleglobe's major share holder, Bell Canada
Bell Canada
Bell Canada is a major Canadian telecommunications company. Including its subsidiaries such as Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for telephone and DSL Internet services in most of Canada east of Manitoba and in the northern territories,...
. Bell Canada then demoted Excel separately to a subsidiary and eventually spun it off to a private company, VarTec Communications, which required FTC approval to return to the private sector. After approval, VarTec continued the network marketing business model. On November 1, 2004, VarTec Communications (the parent corporation of Excel) unexpectedly filed for Chapter 11 bankruptcy protection. Excel sought to be released from its contracts with its independent representatives. This allowed it to continue to receive revenue from its large base of installed customers without paying eternal commissions to the franchisees. Excel continued to operate but ceased to be a multi-level marketing company. Although it created a lot of cash to pay creditors, it was seen as shortsighted by the franchisee association since it removed the main source of sales and customer loyalty.
In September 2005 the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
(FCC) approved the transfer of licenses to Comtel Telecom Assets, LLP and on June 12, 2006 the company emerged from bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
under its new ownership, announcing a return to a slightly revised version of its former name, Excel Telecom. On March 16, 2010, Matrix Business Technologies
Matrix Business Technologies
Matrix Telecom, Inc., operating as Matrix Business Technologies, Trinsic, Powered by Matrix, Excel Telecommunications and various other niche brands is a United States telecommunications firm that provides voice and data services to consumers and small and medium businesses as well as...
announced it would acquire the customers and substantially all the assets of Comtel Telecom Assets, LLP.
Sources
- The Wall Street Journal, Companies That Make Your Life Easier, September 2002