The telecom arena has been through some choppy waters in the last few years, but Telx is more than surviving through it all. CEO Rory Cutaia talks about calling cards, the sluggish economy, and sticking around.
The telecom arena has been through some choppy waters in the last few years, but New York-based Telx is more than surviving through it all. CEO Rory Cutaia talks about calling cards, the sluggish economy, and sticking around.
How did Telx get started?
We saw an opportunity and took a risk. I was an attorney at a large law firm in 1995 when I was approached by a brilliant inventor with an unique device the size of a credit card that automatically dialed telephone numbers when you held it up to the receiver of a phone.
We raised about a million in capital to buy our own switches and provide switching services to calling card companies that were maxing out their networks. We invested in the latest switch technology that deducted value from the calling cards in real time, compared to the systems that would bill you 30 days later for usage.
As the old saying goes, everything good comes to an end. And in the late 1990’s, the calling card industry went into a tailspin with margins withering and most companies going out of business. We were forced to change our business model quickly or suffer the same consequences. We quickly transitioned to the business model that we operate today, a unique interconnection facility in New York City.
What got you personally interested in doing this kind of work?
I was up for a partnership at a major law firm, but when I saw what was happening in telecommunications in the early 1990’s and this opportunity presented itself, I decided to take the risk and made the move. I was young and nothing was holding me back.
What makes your company distinctive?
We are considered the original and largest carrier-neutral SuperNode, with almost 40,000 square feet of “Managed Hub” facilities and network connectivity to more than 100 network providers.
The single greatest benefit we offer is the ability of enterprises and carriers to participate in our “marketplace for communications services” in a neutral environment, where all customers’ products and services are cross-marketed to one another.
Why do you think there’s a need for the services you provide?
At Telx, since more than 100 network providers offer network access side by side in the same place, we can connect any of them to another within 48 hours with no connection fee.
Through this simple cross connection, we help carriers save significant amounts in operating costs by eliminating the need for network access through multiple local loops. We actually believe the efficiencies gained are helping competitive carriers get through the rough patch that the telecom industry is experiencing.
What kind of challenges do you face in running your business?
We are immediately faced with growing our business in the current sluggish economy and the ongoing slump in the telecom sector. While we have doubled our size from last year and see strong growth again this year, it requires a lot of time and dedication to develop strategies to scale and direct our business, as well as create shareholder value, including value.
What do you like best about what you do?
Heading a team of extremely talented people with a single vision, and together, seeing that vision become a reality. That’s what I really enjoy best. To see Telx become a reality after all the adversity and hard work we went through is to me extremely satisfying.
We faced many people telling us that our business model would not work, but we stuck to it. As a matter of fact, we’re still here and they’re not.
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