article

Trading Desk – The GTX Suspends Operations

Posted: 03/2001

Trading Desk

The GTX Suspends Operations
By Bruce Christian

The Global TeleExchange Inc. (www.thegtx.com),
a McLean, Va.-based business-to-business exchange for the telecommunications
industry, has "suspended operations."

A prerecorded message alerts callers that, as of Jan. 11, all business has
been suspended, and that any contact with the company should be through
correspondence to its McLean, Va., address.

Attempts to reach anyone via the company’s website or through e-mail have
failed.

The GTX became the second exchange to halt operations since November 2000.
AIG Telecommuni-cations LLC (www.aigtelecom.com)
announced then that it would end its minutes exchange.

Seeing another exchange pull back operations did not come as a surprise to
Russ Matulich, senior vice president of sales for competitor RateXchange Corp. (www.ratexchange.com).

"Consolidation and/or implosion is necessary in order to create an
efficient market," says Matulich. "Both private and public companies
in all sectors are having problems meeting their obligations and accessing
cash."

The recent developments do not cause concern for Matulich, however.

"The bandwidth trading industry remains one of the largest emerging
opportunities globally. Sure there will be massive problems that are normal in
the commoditization process, including substantial price decline, volatility and
consolidation along the way."

In fact, Matulich believes what has happened may be a good thing for the
eventual recognition that bandwidth is, or will become, a commodity.

"A competitive economy only accelerates a liquid bandwidth trading
market as companies [telecoms] are forced to operate more efficiently and
implement various risk management practices, including bandwidth trading."

Market volatility is one of the criteria often cited as a factor in being
recognized as a commodity.

According to a report in Washtech.com, The GTX may have suspended its
operations precisely to become more efficient.

The Washtech.com report says The GTX has not closed shop. Washington
Investment Partners LLC vice president Christopher Norris says suspending
operations "was just a function of good business sense."

According to Norris, the GTX is working with its "major creditors,"
and expects "a good resolution" in "a couple of months."

Norris did not tell Washtech.com who those creditors might be. He also was
unable to comment on whether The GTX has lain off any staff.

As a company, GTX products integrate trading, delivery and settlement to
provide carriers a mechanism for wholesale service delivery of minutes,
bandwidth and telecom applications. The firm also operates a network and
reservation system that lets carriers connect to exchange points in Los Angeles
and Frankfurt, Germany.

The company launched one year ago. At the time, it and Lucent Technologies
Inc. (www.lucent.com) announced a $25
million agreement to build a carrier-class ATM-backbone network for real-time
execution of wholesale carrier bandwidth and minutes.

Six months later, GTX launched voice traffic services on its exchange, and in
December, it activated a three-day trading option on its "Virtual Real-Time
Exchange."


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