Collaborative: industry news August 2002

Posted: 08/2002

Under Old Management: ECI
Resurrected

By Josh Long

Teligent Inc. executives ousted
Graham Sampson from the company’s conferencing unit last year as the fixed
wireless carrier planned to file a Chapter 11 bankruptcy petition.

Sampson, the chairman and CEO of ECI
Conference Call Services, says he "unceremoniously exited" Teligent’s
office with "armed guards" who were escorting laid-off employees out
the building. That was May 15, 2001 — six days before Teligent filed for
bankruptcy protection.

In January, Sampson regained control
of the conferencing company he founded in 1991.

It is a bittersweet story — one
that begins when upstarts like Teligent still had cash and stock options to
negotiate agreements. In September 2000, Teligent bought ECI from Sampson and
his partner, Michael Nazaruk, for $128 million in cash and stock.

At Teligent, Sampson managed the
conferencing unit as chairman and CEO. Eight months later the debt-laden company
let him go. Sampson sued seeking to enforce a contract that gave him the right
of refusal to purchase ECI if Teligent decided to sell the company. Then he sued
Teligent’s secured creditor, Chase Manhattan Bank.

The legal fees were mounting. Says
the New Jersey resident: "My wife was having a heart attack."

At least 50 potential buyers
initially expressed interest in acquiring ECI as part of Teligent’s
comprehensive bankruptcy process, Sampson says. But the day of the auction, June
6, only one bidder emerged. Sampson and Investcorp jointly purchased ECI for $60
million in cash. "At the end of the day I had two provisions in my
agreement, which they couldn’t get around," Sampson says.

The first included a right of
refusal to buy the conferencing unit if Teligent decided to sell it, he says.
The second stipulated Sampson could start up a new conferencing unit if he was
unsuccessful in buying back the company. Recruiting former employees and
customers would be fair game.

Still, Sampson needed cash if he was
going to buy back ECI. "I was fortunate to have a friend of mine running an
investment banking firm out of New York," he says, referring to Chris
Stoudler, a senior partner at Investcorp.

ECI generated $42 million in revenue
in 2001 from 5,000 customers, Sampson says. The conferencing company serves a
variety of customers in industries ranging from law firms and nonprofit
organizations to computer manufacturing and insurance companies. Credit Suisse
First Boston and Bear Stearns are among the company’s largest corporate clients.
Many publicly held companies tap ECI to host audio- and Web-based investor
relations calls, says ECI spokeswoman Karen Verelley.

In addition to a direct sales force,
the company uses independent sales organizations and resellers to distribute its
services. ECI offers privately branded conferencing services and customized
billing systems.

Executives say the company is
expanding its sales organization. In April, ECI appointed Frank Madonna senior
vice president of sales and marketing. Madonna is the former senior vice
president of global sales at Global Crossing Ltd. ECI also appointed Tim Medina
as CFO. He last served as CFO of Independent Wireless One Holdings, a Sprint PCS
affiliate based in the Northeast.

With no debt, ECI can focus on
improving its product line at a time when businesses increasingly are using
conferencing services to communicate with their employees and clients, Verelley
says. "The conferencing services are just exploding."

IMTC Launches H.323 Forum

By Khali Henderson

International
Multimedia Tele-communications Consortium Inc. (IMTC), a nonprofit
organization, launched in May an H.323 Forum to accelerate applications on
existing H.323 networks, evolution to newer H.323 versions and coexistence with
other protocols such as SIP.

H.323, a standard for voice, data
and video communications on IP networks, was ratified by ITU-T in 1995 and now
is used for many enterprise and wide area communications applications,
particularly those that incorporate video.

Initially, the H.323 Forum will
concentrate on three major deliverables: network interoperability/certification
re-quirements; a forum Website providing protocol, equipment, and application
information and conferences to identify and resolve business, product and
technical issues.