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Exceptional, January-June 2011 - Making the connection: GENBAND - EY - United States

Exceptional, January–June 2011Making the connection: GENBAND

“Don’t be afraid to make a move. The biggest mistake is not making a decision. Don’t be afraid to take a risk.”
Charlie Vogt

Texas-based telecom company GENBAND has some of the world’s largest service providers on its books — but it wasn’t always playing at the top end of the market, CEO Charlie Vogt explains.

Vogt likes to swing a baseball bat back and forth while deep in thought. Perhaps it’s the repetitive motion that helps the former college baseball player concentrate.

“I carry the same bat I had at St. Louis University,” he explains. “I keep it with me in my office for inspiration I occasionally take a few practice swings with it when I want to work something out in my mind.”

Today, his main game is leading GENBAND, a global telecoms leader in internet protocol (IP) telecoms infrastructure solutions and services. These services include Voice over Internet Protocol (VoIP), which allows users to make calls over the internet.

These days, he is savoring the company’s recent successful acquisition of Nortel’s market-leading Carrier VoIP and Application Solution (CVAS) division, which took 18 months of intensive legal and financial wrangling and saw GENBAND outmaneuver the competition.

The acquisition has meant a sea change for both the telecommunications industry and the company. Overnight, its team of 400 grew to 2,200 full-time employees and roughly 800 contractors in 50 countries.

With this latest acquisition, the 47-year-old Vogt is well on his way to building the company into a billion-dollar enterprise. It sells IP switching and networking products and services to mobile, fixes line and cable service providers, allowing them to provide consumers with advanced voice and data services over the internet.

The firm’s growth is nothing less than phenomenal. Under Vogt’s leadership, GENBAND went from being a troubled US$5m start-up in 2004 to a global leader with US$750m in orders by the end of 2010.

Few corporations can boast a 130% compound annual growth rate over six years. At a time of significant investor caution, Vogt convinced JPMorgan’s One Equity Partners to increase its investment to US$400m in debt and investment capital to further GENBAND’s growth.

While the public may not be familiar with GENBAND, they will recognize some of its 600 customers. They include two-thirds of the world’s largest service providers, including Verizon, AT&T and British Telecom.

GENBAND, originally dubbed General Bandwidth, was launched in 1999 by a handful of Austin, Texas, entrepreneurs. Since that time, Vogt has transformed the company into a market leader through aggressive organic growth, unique partnering strategies and bold acquisitions.

The company initially sold a voice-over-broadband IP product called the G6 Universal Gateway. By 2004, however, the telecoms industry had plummeted. John Bayless, a key investor, recruited Vogt, who had an excellent track record with turnarounds, to come in as CEO and rescue the beleaguered firm.

Turnaround time

He set about crafting a plan to resurrect the company. He put General Bandwidth under “lockdown mode” for 90 days as he examined its pitfalls and strengths. The company continued its day-to-day operations, but undertook no major spending decisions during that time.

Vogt then ushered in a savvy, handpicked management team, a new round of funding and experienced sales warriors. He visited potential customers and vendors to strike new deals, and renamed the company GENBAND. By 2006, revenues had leapt to a healthy US$25m. Now it was time to decide whether to stay independent or entertain offers for a sale.

The company opted to stay independent, undertaking a series of acquisitions to expand the product portfolio, grow the customer base and expand into new territories. To date, it has acquired five companies and Vogt is planning to purchase more, aided by the company’s dedicated M&A team.

Vogt has been polishing his entrepreneurial skills since he was young. “I come from a blue-collar family in St. Louis,” he says. “I mowed lawns in the summer, and in the winter I shoveled snow from driveways. In my house, if you didn’t do it yourself, it didn’t get done.”

He was 17 when his father died, and he immediately took over the family carpet-cleaning business, learning as he went. His mother held two jobs to keep the family afloat. “I was pretty much 100% on my own, and so I grew up with a very strong work ethic,” he says.

He earned enough money to buy his first car for $300 when he was 16, then fixing and later selling it for $900. “Whenever I wanted something, I always wanted to earn it myself,” he says. “So when I set the bar high for my company, it’s because I set the bar high for myself first.”

By the time he was in his mid-30s, Vogt was Executive Vice President of Sales for Lucent Technology. With several executive positions on his résumé, including a stint as President of Taqua, he has become a seasoned player in the telecommunications market, logging 25 years in a field where many have dropped out or been replaced.

Today, Vogt’s biggest concern is how to keep GENBAND successful and innovative. He spends half his time traveling around the world meeting suppliers, clients, partners and, of course, potential customers.

“I don’t want to sound trite, but it is true: I want to continually exceed our customers’ expectations,” he says.

“We need to stay ahead of the game technically and in our delivery. A lot of companies think, 'We will build it and they will come,’ but I believe you have to listen to the customer first, and meet their needs with the products and services that they want.”

His advice to other CEOs? “Don’t be afraid to make a move,” he says. “The biggest mistake is not making a decision. Don’t be afraid to take a risk.”

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    Americas Director,
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