Business News - WorldxChange Moves Sales Program Forward as Merger Awaits

Posted: 05/2000

WorldxChange Moves Sales Program Forward as Merger Awaits
BY  TARA SEALS

WorldxChange Communications
(www.worldxchange.com), a private multinational telecommunications service provider has announced it will enhance its independent sales program and expand its multilevel distribution channel to other markets, while it awaits a merger approval with WorldAccess
(www.waxs.com). The approval is expected in June.

In the meantime, WorldxChange continues to operate 45 switches in 12 countries, and to offer an array of telecommunications products and services, from traditional long distance to bundled data and voice, for business and residential customers.

The six-year old provider distributes its products through a multilevel independent consultant network, which is a novelty in the telecommunications market.

The company believes it should provide telecommunications services and help people “become entrepreneurs and manage their business for themselves,” says Dave Flake, general manager of the xPectations Division “Everybody you meet is a potential customer, because everybody uses the phone. There aren’t a lot of opportunities like that out there.”

WorldxChange signs up partners for the xPectations program. They start off selling telephone access to friends and family while they earn residual commissions on all services used. Signing up other consultants to create a down-channel further increases commission revenue. The company believes that anyone can create additional income in the market with this multilevel format.

“There’s a lot of history, and we’ve already lived through all the mistakes there are to live through,” explains Rick Eberhardt, vice president of sales. “Our systems are accurate now. A lot of people that try to provide services to agents and consultants now have to go through those learning curves that we’ve already worked out.”

Flake adds, “The relationship is beneficial for both agents and us. The overhead associated with the traditional deployment of a product through a direct sales channel is significantly reduced through a multi-level approach; meanwhile, people are really flocking to this kind of opportunity. You can work right out of the home, there are no sales quotas, and no inventory requirements. So there’s no pressure to keep a lot of expenses going.”

The provider enhances the program to bring more benefit to its consultants. Partner commissions have increased to 20 percent. An introductory rate of .03 cents a minute on residential services, and a continuing rate of .04 cents a minute on commercial product bolster the program.

The program also features on-line tools and training program. On-line tracking lets agents follow orders, commissions, provisioning and billing status in real-time.

WorldxChange also hosts personalized websites for its consultants. The sites feature on-line order entry and seamless data porting to the central database. Support is available around the clock on the WorldxChange extranet.

“We’re attracting people from all walks of life, from school teachers to stay at home moms to traditional telecom agents who do this for a living,” Eberhardt says of the program. “The telecom agents are very knowledgeable. They see the new products as an additional revenue source, and see the opportunity in branching out.

“The people that are using this as a network marketing tool are going after their friends and their family and aren’t really interested in wanting to know all the technicalities of this industry, but benefit from the ease of access to us.”

He calls the independent sales program a “win-win situation for everybody because all the tools are there for them to sell.”

The company plans to extend the independent consultant program significantly this year. In April, it moved into Canada, and it has plans to expand into 19 other countries.

Despite the relative newness of the sales model, Eberhardt says he expects the strategy will work well.

Flake explains the reasoning is because so many people are trying to take control of their financial future. “For the first time in these markets people will have an opportunity to do just that.”

More changes are in store once stockholders approve in June the merger, which was announced in February, of the two companies. According to the merger agreement, WorldxChange shareholders will receive approximately 31 million shares of World Access common stock.

In addition, World Access will assume approximately $225 million in WorldxChange debt. World Access also has agreed to provide $30 million in bridge financing to WorldxChange.

“This is an exciting opportunity for WorldxChange to become part of a company that is focused on leading the consolidation of the fragmented European telecom industry,” says Walt Anderson, WorldxChange chairman, in a prepared statement. “We anticipate that our integration into World Access will result in significant cost savings in the areas of network costing, least cost routing, network operations, and some general and administrative costs.”