Excel Communications

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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.

Excel had entered the local phone service market more aggressively than smaller competitors such as MCI. 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. The profitability of Excel and almost every other telecommunications firm dependent upon long-distance calling dropped precipitously.

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 the change created much cash enabling it to pay creditors, it was seen as shortsighted by the franchisee association because it removed the primary 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.

Sources[edit]

  • Robinson, James (3 September 1997). The Excel Phenomenon: The Astonishing Success Story of the Fastest-Growing Communications Company -- and What It Means to You. Prima Lifestyles. ISBN 0-7615-1171-7. 
  • The Wall Street Journal, Companies That Make Your Life Easier, September 2002

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