Posted: 08/2000

She’s Laughing All the Way to the Bank
BY LEILANI HAYWOOD

Former Harvard economics student and moonlighting comedienne Melissa Craig has laughed her way from selling data communications equipment to selling the one-of-a-kind enterprise she founded.

“In this environment of constant change, you’ve got to have a sense of humor,” she says. “I make light of everything.”

When PHONE+ caught up with her, Craig was laughing all the way to the bank just days away from closing on the sale of her company – oft referred to as simply “Melissa’s”–to ATC Teleports Inc.
(www.atcteleports.com) for a cool $30
million.

Craig is the founder and president of General Telecom Inc. (www.generaltele.com), the first of a new breed of carrier-neutral enablers for competitive carriers facing the new technology and the new geography of 21st century telecommunications.

Defying categorization, General Telecom is described by its maker as an Independent Gateway Service Provider (IGSP). As its name implies it provides a neutral option for U.S. carriers seeking to lease switching facilities for overseas expansion, or alternatively, foreign carriers seeking access to U.S. markets.

General Telecom, Craig says, makes it possible for “two guys in Beirut with a briefcase on cell phones to compete with the big boys.”

She says the company provides carriers with the equipment and services they need to function with the “same freedom of action, confidentiality of their customer base and control over their business that they would have if they had invested millions of dollars in purchasing, housing and staffing their own switch.”

As with most good ideas, Craig’s was based on filling a void. That void was for independent switching alternatives to support burgeoning competition in international telecommunications services. For this insight and the successful execution of an associated business plan, Craig was named in June a winner of the New York City Entrepreneur of the Year Award. The award is sponsored by Ernst & Young LLP
(www.ey.com) in cooperation with USA Today, CNNfn and CNN, the NASDAQ Stock Market and the Kauffman Center for Entrepreneurial Leadership at the Ewing Marion Kauffman Foundation.

“We were impressed with Ms. Craig’s energy and accomplishments. She has created a new industry and embodies the spirit of an entrepreneur: see the problem, create the solution and execute better than anyone else,” says Entrepreneur Of The Year Program Host Ralph A. Subbiondo, a partner in the Metro New York Area Entrepreneurial Services Group of Ernst & Young.

Craig comes by her problem-solving skills honestly. She managed network implementations for the Federal Reserve Bank, NYNEX Corp. and other major companies, and sold data communications solutions for General DataComm Inc.
www.gdc.com) and Wang Laboratories Inc. (www.wang.com).

In her own company, she used those skills to transform six-year-old General Telecom from a reseller of used switches to a provider of partitioned switching and network management services in 1996.

“All things came together at the right time for the independent gateway switch,” says Craig. “In the international telecommunications arena, callback was huge, and the international arbitrage arena was hot. Competition forced prices down.”

Entry barriers dropped and providers with hard assets from the old legacy world had a need to interconnect globally with new world IP networks, she says.

Using proprietary routing software written by the company’s co-founder Tom Tilton, General Telecom bridged the gap between TDM and IP networks with a gateway that made it possible for a call from South America carried over an IP network to terminate on a PSTN in Asia.

Moving VoIP traffic overseas through their gateways and making it possible for carriers to extend current legacy network assets into the new IP world has been a profitable venture for Craig’s team. In 1999, General Telecom had $12 million in sales.

The company’s gateway hosts interconnections to more than 250 IXCs, ILECs, CLECs, ISPs, teleports, satellite carriers and VoIP providers between the United States and networks in 37 countries. Their switch partitions carry traffic at an annualized rate approaching 2 billion minutes.

General Telecom’s switching centers are located in Los Angeles, Miami and New York, known hubs for international telecommunications traffic. These gateways enable network operators to interconnect to national and international carriers. They also serve as a primary switching center for international traffic generated by calling card companies, ISPs, international carriers and resellers specializing in service to one or more geographic markets.

This year General Telecom is serving an emerging client category–capacity exchanges-where its neutrality, management expertise and existing interconnections are a natural fit. In March, the company agreed to provide switching, interconnection, traffic metering and quality monitoring services to support for international minutes exchange, CommerEx.com
(www.commerex.com).

CommerEx President Richard Kates, says General Telecom was the logical choice for its service “based on their success in establishing and maintaining international connections with more than 250 different carriers and other network operators in the U.S.”

Besides the gateway interconnection, General Telecom provides clients with remote access network management tools, detailed reports and call record management services. This suite of services positions General Telecom as a “ubiquitous telecom utility,”says Craig, explaining that clients can collocate equipment, interconnect to a network, remotely manage their network from a PC laptop, and have billing services taken care of without talking to an ILEC.

“We can have you in business in 30 days,” she says.

General Telecom leverages the limited resources of small communication service providers by providing the same quality of network architecture, staffing and billing services used by major players. Its 50 employees are deployed among its switching centers.

While certainly a pioneer among the current wave of upstart neutral collocation and pooling point operators, in its niche, General Telecom has no rivals, in part, because it has no direct competitors. This has made it attractive for acquisition.

“Satellite links, fiber links, hoses and switches, like love and marriage, go together,” Craig said of the pairing. A subsidiary of American Tower Corp.
(www.americantower.com), ATC Teleports is a provider of domestic and international satellite and IP network services. Its acquisition of General Telecom gives the company the assets to increase its VoIP services.

Under that regime, Craig will serve as president of the partitioned switching services business unit and as vice president of ATC Teleports. General Telecom’s customers, in turn, will have additional primary and backup routing options through ATC Teleports’ IP satellite network.

When asked if the acquisition will cause General Telecom to lose its boutique appeal, Craig is unsentimental.

“God, I sure hope so,” she says. “This deal allows us to do what we’ve always wanted to do, which is open up carrier-neutral facilities in the 10 or 12 major telecom hubs in the world.”

Craig says she already is developing business plans to roll out services in three major cities in Asia, Europe and Latin America in the third or fourth quarter.

Leilani Haywood is a freelance writer. She can be reached at
[email protected].