Excel Communications: 130,000 Independent Representatives loose all?

As previously posted VarTec Telecom Inc filed for Chapter 11 bankruptcy protection on Monday November 1, 2004.

VarTec's bankruptcy filing included all 16 domestic VarTec subsidiaries, most notably Excel Communications.

Excel Communications was VarTec's MLM sales channel, where an estimated 130,000 independent representatives sold long distance and related services through a multi level marketing organization.

It was quickly reported that VarTec intended to shut down Excel Communications and its MLM organization as a result of the bankruptcy filing, instantly stripping its independent representatives of residual incomes built up often over a period of many years. While the financial impact of this sudden stop in commisison payments will vary from representative to representative, there is no doubt that many of Excel's independent representatives are now faced with the prospect of loosing thousands of dollars in monthly income.

The final decision to shut down the Excel Communications MLM sales organization is pending approval by the U.S. Bankruptcy Court for the Northern District of Texas. The motion from VarTec to end its contract with independent representatives of Excel Communications will be heard by U.S. Bankruptcy Judge Steven Felsenthal on November 22, 2004.

If approved, this motion will result in no more commission payments to any Excel Communications representatives, and former South Carolina Senator and Excel agent Michael Rose state that "We have tens of thousands of reps in 50 states that are losing their livelihoods because of these high-level financial machinations".

Mr Michael G. Hoffman, former general counsel to VarTec, will be the company's CEO and lone board member following the bankruptcy filing. Commenting on the decision to stop selling telephone services through independent representatives of Excel Communications, Mr Hoffman said the company was trying to do its best for the representatives but could no long afford to pay them commissions.

Naturally, with the loss of income Excel representatives will see if VarTec's plan gets approval by the court, many representatives of Excel Communications can be expected to seek out alternative sources of income through other sales organizations.

A logical alternative in this aspect would be Cognigen Networks, a publicly traded company offering a free sales opportunity representing a number of well known telecommunication providers. While the fact that Cognigen is free to join may not sit well with Excel representatives accustomed to making most of their money on recruiting new representatives, those Excel representatives making money from actual product sales will likely find the Cognigen products and compensation plan very appealing.

VarTec has expressed an intent to help its Excel representatives transform to a new company though, and there are reports of talks between VarTec and Shaklee, a San Fransisco based multi level marketing organization currently focused on selling nutritional products through its independent agents. According to Mr Hoffman, Shaklee would become a distributor of VarTec phone services under the deal being discussed.

How such a partnership would be received by the 130,000 independent representatives of Excel Communications remains to be seen, but I personally have a hard time imagining too many representatives getting all that excited about giving up their hard earned compensation for sales already made on VarTec's behalf just to join another organization and start selling the same products all over again...

VarTec Telecom Bankrupt! Excel shutting down MLM network.

News are out today that VarTec Telecom Inc., Excel Communications and 15 associated companies have filed for Chapter 11 bankruptcy protection.

The filings are said to come as a result of a critical cash shortage, and debts total more than $550 million dollars. There are no words at this time as to how this will affect customers of such Vartec dial-around plans as 10-10-297, 10-10-457, 10-10-636, and 10-10-811 or customers signed up through the MLM network of Excel Communications.

It has been confirmed though that Vartec will be cutting loose 130,000 sales representatives selling long distance services through Excel Communications, the well known MLM company Vartec bought for more than $200 million back in 2002. I hope to be able to bring more news on the apparent death of Excel shortly. In the mean time, former Excel representatives might want to take a look at the free Cognigen program as a possible replacement for the Excel business that now seem to be lost...

Using Tel3 Advantage Long Distance

As I posted previously, I successfully signed up for Tel3 Advantage long distance.

I have now had a chance to use the service for a few loooooong international calls, and I must say that I am quite pleased, although I am not ready to cancel service with CogniWorld long distance quite yet.

Call quality has been excellent on all of my calls, fully comparable to what I am used to using CogniWorld. I did loose the connection in the middle of one of my calls, but this can happen with any carrier, and since it has not happened again, I am hesitant to blame this on Tel3 Advantage.

I do find having to dial a toll-free access number prior to my calls to be somewhat of a hassle. Previous users of 1010 long distance carriers like 1010987 probably will not have a problem with this though. In fact, Tel3 Advantage offers free speed-dialing where you can program your most called numbers, and if you also program the toll-free access number as a speed-dial on your telephone, you can complete your call in no time...

My regular long distance carrier (CogniWorld long distance) offers very competitive rates both for state-to-state (3.49 cent/minute) and international long distance calls. However, looking at price alone, Tel3 Advantage still wins hands down for my calling pattern.

My most frequently called country is Norway, where Tel3 Advantage charge 4 cent/minute compared to 5.7 cent/minute with Cogni World.

By the way; can you guess what the basic AT&T rate for calls to Norway is? $2.78 per minute during peak hours, and $1.84 per minute off peak! YIKES!

Anyway, we also frequently call Switzerland, for which Tel3 Advantage charge 4 cent/minute, compared to 5.8 cent/minute with CogniWorld (and $2.90 or $1.82 with AT&T LOL).

The domestic rate of 2.9 cent/minute with Tel3Advanatge also beats the 3.49 cent/minute we pay with CogniWorld.

CogniWorld also has its benefits though. First of all, CogniWorld bills in six second increments (30 second minimum for international calls), while Tel3 Advantage bills in full minute increments. As I mentioned, using CogniWorld is more convenient, as it does not require dialing any extra digits. Also, since CogniWorld is NOT pre-paid, I never lock up money in calls I might make tomorrow, next week, or next month...

So, what is my conclusion?
Based on my personal experience, both CogniWorld long distance and Tel3 Advantage are excellent services that I can feel confident recommending to anyone.

Personally I will probably keep using CogniWorld for most day-to-day calls from home, where the convenience of direct dialing is nice to have, and the savings with CogniWorld every time I hit an answering machine probably will make up for the slighly lower per-minute rate with Tel3 Advantage.

Tel3 Advantage is excellent as a calling card though, as well as a way to make greatly discounted international calls from a cellphone.

Of course, if I know I will be talking for a long time, I will probably be using Tel3 Advantage from home as well, as illustrated in the little thought experiment below.

If we assume 60 minutes of international calls to Norway per day next month, the savings using Tel3 Advantage over CogniWorld will amount to $31.62 over the course of the month, or a decent meal for me and my wife.

The savings using Tel3 Advantage over AT&T basic rates (assuming calls during peak hours), will amount to $5096.40 or a decent used car.

Something to think about...

Signing up for Tel3 Advantage long distance

Ok,
So I have signed up for the Tel3 advantage calling card/dial-around service. This post will share my experience with the actual order process - I will report back with my experience actually USING the service in a day or two...

The big question of course: Will Tel3 advantage be able to permanently take the place of CogniWorld long distance, my regular long distance carrier. Seeing that I am extremely happy with Cogni World, it certainly will not be an easy task...

When signing up, I had to choices:
Order Tel3 advantage online
Order over the phone: 1-800-330-6897 (Activation code: 800719)

Personally I prefer to do everything online, but since Tel3 approached me to offer this service on my Discount Long Distance website, I decided I would give the call-in number a try.

My first two attempts were a no-go, as I called late at night and reached a rather generic Tel3 voicemail. On my third attempt - DURING A WEEKEND - I got through though, and a nice CSR was happy to answer all my questions. More important from a business perspective: She refused to take my order over the phone when I pretended I did not have the 800719 activation code - I guess we all know there are more than enough companies that would have jumped at the chance to secure a sale while cutting out the sales agent in the process, so thumbs up to Tel3 for that!

I proceeded to place my order online, and must admit I was quite bummed at the end of the order process when I was asked to call in to complete my order. (I do not know if this is standard procedure or only an added security measure applied to select orders - let me know if you have experience with this!)

I decided to see what would happen if I did not call in to verify my order - and within the next hour I received a call FROM Tel3 for the verification. Once I verified my information my account was instantly activated, and shortly thereafter I received my confirmation email for the order - once again thumbs up!

All in all I am quite satisfied with the ordeirng process, but it would have been an improvement if hours were posted for the call-in order number (if it is not available 24/7), and if the voicemail message was more geared towards what I was calling to do: Order service!

Having to call in to verify my online order kind of defeats the purpose of ordering online I guess, but the proactive customer service; calling me to verify since I did not immediately call them made up for it, and left me a happy camper before my first Tel3 Advantage call...

Free Long Distance?

Free long distance?

I am looking into this new long distance calling plan from Tel3 called "Tel3 Advantage". If you have any experience with this plan, or with the company in general, please leave me a comment below!

Basically I was approached by the company asking me to consider including this plan on our website, so I decided to take a look.

The plan looks decent at first look - certainly much better than 10-10-987, 10-10-220 or other 1010 long distance plans. It is a dial-around, but rather than using a 10-10 code, the service is accessed through a toll-free number.

Signup can be done either online or through a toll-free number (1-800-330-6897 Activation Code: 800719). The plan offers 250 FREE minutes of long distance for signing up, which upon a little research turns out to be a $7.25 credit that can be used towards domestic or international calls.

Since I call my family in Norway quite a bit, for me this translates into 181 free minutes (at 4 cent/minute), or a full 3 hours of FREE talk time.

This is a prepaid plan, so upon signup you chose whether to buy $25, $50, or $100 worth of calls, as well as the maximum number of automatic recharges per month. Once your balance falls below $3, your account will automatically be recharged with your chosen amount, as long as you have not reached your monthly maximum number of recharges. The plan is advertised as having no monthly fees or other hidden charges of any kind, and both the domestic (2.9 cent/minute) and international long distance rates look very attractive.

Assuming call quality is good, I really think this is a plan worth considering. I will sign up for an account, and report back here with my experiences...

7 years from now...

I would like to start my ventures into blogging with a little story someone sent me via email. It really is foood for thought; where will YOU be 7 years from now?


What Will You Be Doing 7 Years From Now?

I graduated from Brazosport High School in Freeport, Texas in May 1972. Not dressed in white (honors), but I graduated.

That summer like the previous summer, I worked as a longshoreman loading corn, flour and corn sacks weighing 50 to 140 lbs. and 900 lbs. caustic soda drums on freight ships bound to other countries at nearby Brazos Harbor and Dow Chemical A2 Dock.

This was one of the better paying jobs in the area. It was grueling, hard, heavy work, but I loved it at the time. My father had been doing this job most of his life since it paid well.

Fall came around and I had already decided that I did not want to make my living as a longshoreman. Work was inconsistent and when it was there it only went to the ones with the most seniority, unless there was too much. There was very little opportunity for a better job when you got older.

I had always heard that a college education would get you a better job and decided to find out. So I went to nearby Brazosport College and set up an appointment with a counselor.

I got to his office at the appointed time and he asked me what work or profession interested me the most. I had taken Auto Mechanics I & II during my junior and senior years in high school and asked him if Brazosport College had an auto mechanics program.

He said "no." I asked him if they had anything similar to it. He said that the Machine Tools Technology program was very similar and described the program to me.

I was very interested and asked him how long it would take if I went full time. He said "4 years." I said I couldn't go full time since I am working (whenever work was available).
I asked how long would it take if I go part time? He said "7 years." I was shocked. I said, "Man, I'll be old then, I'll be 25 years old. I don't think so."

He asked me, "what did you say you did for a living right now?"

I told him again that I worked as a longshoreman throwing bags and manhandling drums. Then he bent over his desk and looked me square in the eye and asked me the most significant words I will never forget in my life:

"IF YOU DON'T TAKE ANY CLASSES. WHAT WILL YOU BE DOING 7 YEARS FROM NOW?"

These words hit me like a ton of bricks! I sheepishly told him that I would be doing the same thing. I signed up for the classes right then and there.

These prophetic words have inspired many of my relatives and friends. The sun will rise and fall 365 days a year. What you choose to do in between will determine many things in your life.

This story alone has inspired relatives and friends to realize an age-old truth: Time will go on regardless and it waits on nobody.

Years later, I told a co-worker this story. He got inspired enough that he went on and got 3 different degrees in computers in less than 7 years! He said afterwards, "7 years ago I would've been saying to myself, 'If only I had the opportunity.'"

TIME WILL PASS REGARDLESS!