Access One Communications Acquires OmniCall, Combined Companies, with over 50,000 Local Access Lines in Southeast, Intend Nationwide Expansion - Company Business and Marketing

Cambridge Telcom Report, Oct 25, 1999

Access One Communications, an affiliate of Sirco International Corp. (name change pending to eLEC Communication Corp.) and OmniCall, Inc. Wednesday announced that Access One has signed a definitive agreement, subject to customary regulatory approval, to acquire all the outstanding shares of OmniCall. The combination will result in a Competitive Local Exchange Carrier ("CLEC") with approximately 55,000 access lines in the BellSouth territory operating on Access One's UNE-P network.

"This acquisition is an important milestone for Access One," said Ken Baritz, Access's Chairman and CEO. "Not only does it put us over 50,000 lines, but this acquisition represents the third opportunity Access One has had to take a large reseller base that is losing money and convert it to our UNE platform so that it generates positive EBITDA. We have already converted our own reseller base and a reseller base we purchased from e.spire (Nasdaq: ESPI). In both instances the lines were losing a substantial amount of money until we successfully converted them to our own network, where they now generate a positive contribution margin to the company. We expect to have OmniCall's base generating positive EBITDA within 90 days."

Baritz continued, "Our combined companies create a powerful CLEC that operates throughout the southeast (Florida, Georgia, Tennessee, Kentucky, South Carolina, North Carolina, Louisiana, Alabama and Mississippi) with annual revenue in excess of $40 million. In addition, we are pleased to have a seasoned telecom executive and investor, William M. Rogers, join our board of Directors. Mr. Rogers has extensive telecommunications experience, which includes the co-founding of: OmniCall, Inc., Teleco, Inc. and Corporate Telemanagement Group, Inc. ("CTG"), a $100 million facilities-based long distance carrier."

Mr. Rogers stated, "OmniCall is very excited about moving its business onto Access One's network. In addition to our core business in the southeast, OmniCall is licensed in 12 states, representing five additional Bell Operating territories, which will enable Access One to rapidly expand beyond its current southeastern base. Access One now has a nationwide footprint and can expand its presence rapidly, using the same customer-first approach that has helped them grow from 2,500 lines to more than 50,000 lines during the last two years. We bring to Access One an association of approximately 160 established dealers (Teleco, Inc.) as a nationwide marketing and distribution channel. This unique marketing advantage represents potential annual recurring revenue in excess of $450 million in just the nine-state BellSouth territory. We believe Access One's strategy works and that they can now leverage our existing licenses and our relationship with Teleco to create the same growth they enjoyed in the BellSouth territory throughout all of the Bell regions."

Paul Riss, eLEC's CEO, stated, "eLEC indeed welcomes this merger and the addition of Bill Rogers to the Access One Board of Directors. In 1991, Mr. Rogers cofounded CTG, a long distance carrier that was purchased in 1995 for $140 million by LCI. With the subsequent sale of LCI to Qwest (Nasdaq: QWST), Mr. Rogers became one of the largest individual shareholders in Qwest. His telecom expertise and relationships will be highly valued by us."

Mr. Baritz continued, "We are very pleased with OmniCall's customer base which, compared to other CLECs, contains superior revenues per line, lines per customer, and length of customer contracts while maintaining minimal bad debt and churn levels. Many of these customers were introduced by Teleco, which has twice been named to the Inc. 500 list and was also named four consecutive times as the largest independent interconnect organization in the country by Teleconnect Magazine."

Larry Long, current President of OmniCall, will join Access One in a senior management position focusing on maximizing the revenue of the combined companies. Mr. Long previously was the C.O.O. at MFS Intelenet, the largest revenue contributor to MFS prior to its purchase by Worldcom in 1996. Mr. Long's primary role at MFS was driving the Centex and Realcom acquisitions that contributed in excess of $250 million in revenue at MFS.

Access One Communications is a Florida-based competitive local exchange carrier, which provides an integrated suite of telecommunications and Internet services to small and medium-sized business in the Southeastern United States. Access One is operating under a virtual local services network platform through the first region-wide UNE-P Agreement with a Regional Bell Operating Company.

eLEC Communication Corp. is a publicly traded local telecommunications company that is taking advantage of the convergence of the current and future competitive technological and regulatory developments in the Internet and telecommunications markets through the integration of its wholly owned subsidiaries, Essex Communications and WebQuill Internet Services. The company provides an integrated suite of communications services to small and medium-sized business customers, including local, long distance, dial-up access, dedicated access, and Web site design and hosting.