Williams Communications Buying Interests in China-, Japan-U.S. Cables From Alliance Partner SBC
April 12, 2000 05:18 PM Eastern Time
TULSA, Okla.--(BUSINESS WIRE)--April 12, 2000--Williams Communications WCG and SBC Communications Inc., SBC today announced that Williams has agreed to buy SBC's interests in two undersea communications cables between the United States and China and Japan.
The agreement, which has been approved by the boards of directors of the two companies and is subject to review by applicable governmental authorities, furthers the strategic alliance formed over a year ago between the two companies. The alliance gives SBC access to long-haul transport capacity at industry-leading prices for its voice and data business, while providing Williams with an anchor tenant for its advanced, fiber-based ATM backbone network which will soon reach more than 125 markets nationwide and countries around the world. Currently, Williams' U.S. network has more than 24,000 miles in operation and will reach 33,000 miles by the end of 2000.
Financial terms of the agreement were not disclosed.
SBC agreed to invest in the two cable projects in 1997 and 1998, prior to forming the alliance with Williams. This transaction complements the alliance, enabling Williams to make best use of the cable capacity with its carriers' carrier strategy, while giving SBC low-cost access to Trans-Pacific transport capacity. The China-U.S. cable is operational and the Japan-U.S. cable is expected to be operational by the third or fourth quarter of this year. SBC was one of 12 initial members on the Japan-U.S. consortium and one of 15 initial members on the China-U.S. consortium.
"Our relationship with Williams Communications is important to our strategy of becoming a full-service, end-to-end global provider, creating significant value for our shareholders while minimizing capital investments in long-haul networks," said Ed Mueller, president, SBC International Operations.
"The sale of our interests in these cables is consistent with this strategy and underscores the significant long-term benefits of this alliance for both SBC and Williams," Mueller said.
"Acquiring these gateways to Asia aligns perfectly with Williams' aggressive international strategy, providing direct access to and from global financial markets driving high volumes of traffic onto our domestic backbone, the largest next-generation network in the United States," said Howard E. Janzen, president and chief executive officer of Williams Communications.
The China-U.S. cable has its northern landing point at Bandon, Ore., and its southern landing point at San Luis Obispo, Calif. The Japan-U.S. cable has its northern landing point at Manchester, Calif., and its southern landing at Morrow Bay, Calif.
Williams Communications completed connection of its U.S. network to the China-U.S. cable at Bandon in December. This interconnection point is fully operational and in use by several of Williams' international carrier customers. Williams is completing its network construction to the other landing points and will be able to transport traffic when these cables become operational later this year.
The Japan-U.S. cable will be capable of handling circuit-switched or packet-switched communications. It will operate initially at 80 gigabits per second, the equivalent of nearly one million simultaneous voice calls. Eventually, the cable can be expanded to 640 gigabits per second, enough capacity to carry 7,741,440 simultaneous voice calls.
The China-U.S. cable is currently the most technologically advanced operational cable of its kind in the world, employing a fiber-optic submarine cable system designed to meet traffic requirements between the participating nations through 2025. The cable is a 16,000-mile loop system, with a capacity equivalent to 241,920 circuits per fiber strand.
SBC Communications Inc. (www.sbc.com) is a global communications leader. Through its subsidiaries - Southwestern Bell, Ameritech, Pacific Bell, SBC Telecom, Nevada Bell, SNET and Cellular One - and world-class network, SBC provides local and long-distance phone service, wireless and data communications, paging, high-speed Internet access and messaging, cable and satellite television, security services and telecommunications equipment, as well as directory advertising and publishing. In the United States, the company currently has 90.4 million voice grade equivalent lines, 11.2 million wireless customers and is undertaking a national expansion program that will bring SBC service to an additional 30 markets. Internationally, SBC has telecommunications investments in 23 countries. With more than 204,000 employees, SBC is the 13th largest employer in the U.S., with annual revenues that rank it among the largest Fortune 500 companies.
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