CPTG was formed twenty-one months after the peak of the telecom bubble - a time of great uncertainty for the industry (see the Telecom Index below and industry description provided by an unknown source):

From the enactment of the investment-inspiring Telecommunications Act of 1996, through 2000, the telecommunications industry in the U.S. alone raised about $1.3 trillion in new equity capital from Wall Street. Debt was accumulated by the industry in even greater amounts. According to The Wall Street Journal and Thompson Financial, telecom firms borrowed about $1.5 trillion in debt from banks and issued $630 billion in corporate bonds from 1996 through 2001. By 1999-2000, new telecommunications-related equipment accounted for a phenomenal 12 to 15% of all capital investments among the Standard & Poor’s 500 firms— America’s leading publicly held corporations.

While new equipment was being installed, demand for new telecom services was growing by as much as 100% per quarter. Much of this unbridled optimism and aggressive investment was based on the premise that the high demand for broadband access to voice, video and data would provide room for an endless number of competitors backed by an endless quantity of infrastructure.

The optimism and the telecom funding bubble finally popped. Much of the demand was fueled by now defunct dot-coms that needed multiple telephone and Internet connections. The telecommunications industry was the “ground zero” of the technology business collapse of 2000-2001. The telecom meltdown led to the dismissal of more than 300,000 workers employed directly in the telecommunications business. About $2 trillion of telecom industry value [went] down the drain in the form of plummeting stock values and defunct corporate bonds.

Amidst this chaotic backdrop, CPTG saw a wonderful opportunity as evidenced by the following charts:

In addition to the incredible growth and potential these statistics represent, CPTG made the following observations in 2001:

• Displaced Talent: An incredible base of talented, displaced once and former telecommunications professionals exists. With technology gains and mega-mergers, this based of professionals is likely to increase.

• Willingness to Try Private Label Services: Business customers are willing to try private label services. In light the past several years business history, consumers are not emphasizing brand names as much as they are other service criteria. The take-up rate for alternative phone services (e.g. Skype, Vonage), as measured by the speed of customer acquisition, indicates that consumers will try alternative phone services.

• Price, Responsiveness & Ease of Order Administration: Business consumers value a competitive price coupled with responsiveness as well as an easy to follow contract and order administration process.