What happened to Talk America phone service?

It’s really true that this site was the number one selling agent for Talk America Phone company back in 2002. We basically taught the company how to sell their phone service to customers online.  Since that time, I often get asked the question what ever happened to Talk America phone service?  After all, they were pretty darn popular for awhile and they had great rates.  I’d have to say that they were the biggest player in taking advantage of the deregulation of land line phone providers like Ameritech.  Here’s a little history of the company.

Talk America was founded in 1989 as Tel-Save Inc. It was formed for the purpose of reselling AT&T long-distance service. After a few years, Tel-Save became one of the biggest wholesalers of AT&T long distance. In 1994, a scandal involving illegal campaign contributions to Congressman, Jim Greenwood, resulted in a name change to Tel-Save Holdings.

Most of their success thus far relied on their affiliation with AT&T and now the needed to acquire their own subscribers.  In July of 1997, they acquired a huge provider of U.S. telecom services named Share Technologies Fairchild Inc.

At a cost of $511 million, or $11.25 per share, Tel-Share CEO Dan Borislow viewed the transaction as key.  Several other acquisitions would follow. the name changed once again in 1998 to Tel-Save.com and then to Talk.com in 1999.

It was in October 1999, that Talk.com began providing local phone service.  At first, they offered this service only to small and medium-sized businesses. Then, in March 2000 Talk.com merged with Access One Communications. This local telephone company provided local phone service to residential customers in nine states.  As a result of this re-positioning in the local phone market, Talk.com was able to begin an aggressive strategy of selling bundled telecommunications services including local, long-distance, and Internet.  As a result, their brand name awareness increased and customer acquisition began to grow steadily.

After some legal turbulence, Talk America reported a huge loss in August 2001, but by pushing its debt out to the future, they were able to recover.  Their success was built on leasing lines from the baby bells at very attractive prices and then using that advantage to sell at a savings to it’s customers.  This model would prove profitable for the next few years before Talk America was acquired by company called Cavalier Telephone and TV in 2006.