2nd Century to close shop

2nd Century Communications is officially closing its doors and will lay off the last 121 employees on staff during the next few weeks. The company provides local and long-distance phone services and help-desk services to business customers.

“It’s another ego-driven loss,” said Tim Mcelgunn, senior research analyst for Stratecast Partners. “So many of these companies really thought they had a company long before they truly did. They were start-ups, they had an idea, but no one had proven their business ability. The ones that do survive are going to come out a lot stronger.”

Mcelgunn stated three factors that led to the company’s demise: its “land-grab philosophy” of expanding their business as soon as possible; its focus on ATM, which caused the company to spend money on switches instead of business; and its attempt to expand into Tier 1 markets after initially focusing on Tier 2 cities.

“They just ended up in a situation where, given the investment community’s current mood, it just was tough for them to show profitability,” Mcelgunn said.

The competitive local exchange carrier’s customers, most of who are based in the South, will be switched to other service providers.

Founded in 1999, 2nd Century had 450 employees at its peak and $155 million in investments.