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Teleglobe snaps up VoIP leader

The phone and data traffic carrier says it is buying ITXC, a wholesaler of Internet phone services, a deal that should create a top-3 supplier of internationally dialed phone calls.

Telecommunications bandwidth provider Teleglobe is buying ITXC, a leading wholesaler of Internet phone services.

Shareholders in ITXC, short for Internet Telephony Exchange Carrier, will end up with a 28 percent stake of Teleglobe when the deal closes as expected in March, the Montreal-based bandwidth dealer announced Tuesday. Additional financial terms were not disclosed.

Liam Strong will continue as chief executive of Teleglobe, which currently provides global infrastructure and services to carry voice, data, IP and mobile roaming traffic for carriers. The merger brings in ITXC's more focused voice over Internet Protocol (VoIP) services, which are used by 175 major telephone companies for international calling. ITXC's chairman, Tom Evslin, will take on the title of "non-executive chairman," according to both companies.

Analysts have been predicting that larger telecommunications companies like Teleglobe, AT&T, Global Crossing, Level 3 Communications and Sprint would gobble up VoIP providers in order to cash in on the growing interest in making phone calls over the Internet.

The ITXC acquisition creates an entity that will be one of the top three providers of internationally dialed phone calls, according to Teleglobe.

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The Canadian company said carriers used the bandwidth it sold last year to provide about 7.4 billion minutes of talk time. ITXC was responsible for approximately 4 billion VoIP-generated minutes in 2002.

ITXC, which recently reported a net loss of $9.9 million in its third quarter, rejected an offer in April from another bandwidth wholesaler, Integrated Device Technology. At the time, it called the financial terms of IDT's deal "unacceptable."