EXCEL COMMUNICATIONS Review and Profile

EXCEL COMMUNICATIONS no longer appears to be active as a direct sales company.

Excel Communications is no longer operating as an MLM or as an independent company. Its telecommunications customers and assets passed through several owners, while the network-marketing program ended during the VarTec bankruptcy. E

Original Npros business profile for EXCEL COMMUNICATIONS, preserved below for archival purposes:

Excel Communications was founded in Dallas, Texas, in 1988 by Kenny Troutt and Steve Smith. The company began selling long-distance telephone service in 1989 and used independent representatives rather than conventional advertising and retail sales channels. Representatives were encouraged to enroll friends, relatives, co-workers and other personal contacts as telephone customers, a strategy Excel described as "warm-market" selling. The company later expanded into business telecommunications, paging, Internet access and other communications services.

Excel used a multilevel compensation structure in which independent representatives earned commissions from the telephone usage of customers they personally enrolled. Representatives could also earn commissions and bonuses from customers enrolled by representatives in their downline organizations. By March 1997, Excel reported approximately 4.1 million customers and one million sales representatives, although many of the registered representatives earned little or no commission and representative attrition was high.

The company became one of the largest telecommunications MLMs ever developed. Revenue increased from approximately $24 million in 1992 to $153 million in 1994, $506.7 million in 1995 and about $1.4 billion in 1996. Excel completed its initial public offering on May 10, 1996, and traded on the New York Stock Exchange under the symbol ECI.

Excel expanded through conventional telecommunications acquisitions as well as network marketing. On October 14, 1997, it completed its acquisition of Telco Communications Group, which became a wholly owned subsidiary under a newly formed Excel Communications holding company. In November 1998, Excel completed a stock merger with Canadian telecommunications company Teleglobe in a transaction valued at approximately $3.2 billion. Excel's retail operations continued from Dallas as part of the combined Teleglobe organization.

VarTec Telecom acquired the Excel companies from Teleglobe in April 2002. At the time, Excel had an international network of more than 130,000 independent representatives. A bankruptcy-court opinion described those representatives as receiving commissions and bonuses based on customer use of Excel services and the performance of their downlines. VarTec encountered serious financial difficulties soon after completing the acquisition.