two good articles on idtc transatlantic fiber (thanks to vihn for the articles).
IDT Acquires Fiber Capacity on Transatlantic Cable System
Leading telco purchases IRU on undersea fiber and cable; results in reduced terminating costs and improved margins
HACKENSACK, NJ - November 7, 1997 - IDT Corporation (NASDAQ: IDTC), a leading provider of low-cost international telecommunications, today announced that it has signed an $8 million agreement with Global Telesystems Ltd. to acquire an indefeasible right of use (IRU) on transatlantic cable between the US and UK on the Atlantic Crossing (AC1) cable network. The new route will be connected to the existing IDT telecom network, and is a critical step toward achieving the Company's strategic initiative of expanding its worldwide telecom infrastructure.
The Company expects to begin routing traffic over the new cable network by June 1998, which is expected to result in significantly reduced operating costs, improved margins, and decreased terminating rates. This new acquisition further establishes IDT as a fast-growing international carrier.
The purchase of the STM-1 cable, which is equivalent to three DS3s (155 megabits of capacity), replaces leased circuits between the US and UK, and is expected to reduce the transatlantic portion of the costs by a substantial magnitude. The cable will provide more than 10 times the current leased capacity. The Company has also secured favorable financing commitments, and intends to expand its cable network throughout 1998 with fiber connecting the UK and additional European countries. This purchase will also provide the Company with an expanded UK facility that will mirror IDT's US facilities from a management, technical, and cost perspective, and gives the Company a strong beachhead in the European market, which will position the Company well to compete with the European telcos as those markets deregulate in the coming year.
"Buying the right to use these routes allows us to improve service and quality for IDT customers and will help us further emerge as an industry leader," said IDT President Jim Courter. "This agreement will enable IDT to route more traffic over our own network, decrease our cost structure, improve gross margins, and will result in quicker provisioning for both wholesale and retail customers. We look forward to continuing to expand our worldwide telecommunications network in the coming quarters."
The Atlantic Crossing cable system combines state-of-the-art wavelength division multiplexing with erbium-doped fiber amplifier technology, making it the most powerful cable system and assuring customers capacity on demand. AT&T (NYSE: T) signed an agreement with AC1 earlier this year to build this cable network.
IDT Corporation is a diversified telecommunications company with seven years of innovation within the international telecommunications arena offering a variety of wholesale and retail services. The Company routes and resells international long distance services to individuals and businesses in over 225 countries and to telecommunications carriers in the US and overseas. The Company currently has over 400,000 retail customers using an array of services including international long distance, Internet, and Internet telephony services. The Company is a leader in Internet telephony, routing telephone calls over the Internet at substantially reduced rates.
Except for historical information, all of the expectations and assumptions contained in the foregoing are forward-looking statements involving risks and uncertainties. Important factors that could cause actual results to differ materially from such forward-looking statements, include, but are not limited to, the competitive environment for Internet telephony, changes of rates of all related telco rates and services, legislation that may affect the Internet Telephony industry, IDT's ability to operate the services described on a large scale commercial level. For additional information regarding these and other risks associated with the Company's business refer to the Company's reports filed with the SEC.
Sarah Hofstetter
Director, IDT Public Relations
201-928-2882
idt.net |
