Touch 1 buys Telnet Systems

I first started at the Bemidji (Minn.) Pioneer as an intern in the summer of 1996. That would begin six years as a news reporter, sports reporter and copy editor for a small, six-day-per-week daily newspaper in northern Minnesota. I wrote a large range of stories from multiple beats, to features to sports, my favorite being the coverage of the Red Lake Reservation High School basketball team named the Warriors. Here is a collection of my stories from my time at the Pioneer.

July 25, 1996

By Devlyn Brooks

Staff Writer

Telnet Systems Inc. could become Beltrami County's largest employer in the next five to six months, employing more than 900 people, said Jim Corman, president of a company called Touch 1.

Corman announced the purchase of the Fergus Falls-based Telnet Systems, which has a telemarketing facility in Bemidji, Wednesday at a press conference in Bemidji.

The company has big intentions for the Bemidji Telnet facility as well as the entire company, which has a third plant in New York Mills, Corman said.

The most important intention is expansion of the Bemidji center to employ more than 900 people, 825 full-time and 120 to 175 part-time. Corman said that as soon as his company can feasibly start to expand Telnet, it will. Telnet currently employs 235 people.

A purchase price for Telnet was not disclosed.

Corman said he sees tremendous growth potential in the local office of Telnet because the physical structure of the business does not need to be expanded, and there is an untapped work force in the Bemidji area. There also is unutilized space in the building that can be used to add more cubicles.

According to Corman, Touch 1 is a parent company based in Atmce, Ala. It owns two other subsidiary companies, besides the new acquisition of Telnet. The first is Touch 1 Long Distance and the other is Touch 1 Wireless, which is related to the cellular industry. Touch 1 Long Distance only sells to residential customers and is the third largest carrier of this sort in the nation. When including business long distant accounts, the company would be somewhere in the range of the 10th to 13th largest in the nation, he said.

Touch 1 Long Distance was one of the reasons the parent company of Touch 1 wanted to purchase Telnet, Corman said. Previously, the company had contracted out all of its marketing business for residential long distance service, paying other companies to sell their long distance packages.

The Telnet acquisitions came about after Corman decided it would be more cost efficient to purchase an in-house marketing firm to handle the long distance packages.

Touch 1 limited its search to four of the 100 companies it started doing trial business with. During the tiral period, Telnet outsold the other companies during each of the first seven weeks, and Touch 1 decided to pursue the purchase of the company.

Telnet officially became the third subsidiary of Touch 1 about two weeks ago. The company president said he wanted a rural-based company that had a work force with a good work ethic, and Telnet best fit the criteria.

After Touch 1 acquired the company, the three subsidiary presidents worked out the largest telemarketing contract in history, representing the purchase of more hours of telemarketing than any other contract ever, Corman said.

"If you take all the calling in all three (Telnet) centers in a month and multiplied by nine," Corman said, "you still wouldn't reach the number of the contract."

According to Corman's plans, Telnet will be marketing both for Touch 1 and for outside companies as it does now. This will contribute to a more stable working environment, instead of the fluctuating atmosphere most telemarketers work in, he said.

Corman said his business is committed to his employees and plans to offer quality benefit packages to keep the current Telnet employees, while adding new people to expand.

"If you want employees to remain loyal," he said, "you have to be loyal to them. My grandfather taught me the greatest responsibility in business was to take care of your employees."

Telnet Systems Inc., a telemarketing company, opened its Bemidji office in March under a joint partnership with the Joint Economic Development Commission in which the JEDC secured $500,000 in loan funds and a building site in the industrial park for the construction of a Telnet office. In addition, the JEDC provided an $800,000 loan to Telnet for its high-tech equipment. A five-year lease was worked out between the JEDC and Talent to pay back the loans.

Larry Young, director of the JEDC, said he had not talked with the new owners yet about the agreement, and he does not know how they will want to handle it. Corman, however, said that any future expansion costs would be borne by the company.