This explains it:
williamscommunications.com
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December 9, 1999
Williams Communications signs $130 million network services contract with Prism Communication Services
Agreement boosts Prism's national network expansion strategy
TULSA, Okla. - The network unit of Williams Communications Group, Inc. (NYSE:WCG), has signed a $130 million agreement with Prism Communication Services, Inc., a leading integrated communications carrier, to provide long-term capacity and fiber on Williams' award-winning fiber-optic network.
"This transaction underscores the value of Williams' unique strategy focused on enabling carriers' success in the marketplace," said Howard Janzen, president and chief executive officer of Williams Communications. "Companies like Prism are looking to enhance their own networks by broadening their reach with a best-in-class, leading-edge network that can deliver unmatched efficiency."
The majority of the value in the transaction is in long-term network capacity on the Williams Multi-Service Broadband Network?. Williams Communications will also provide collocation and fiber maintenance services over the 20-year agreement.
Funding of the $130 million transaction consists of $120 million in cash paid over the life of the contract as well as Prism's issuance of $10 million of common stock to Williams Communications for these services. "Based on our assessment of Prism's strategy, network architecture and management, we are excited about the growth potential and opportunity being created through this long-term relationship," added Janzen.
Prism, a subsidiary of Comdisco, Inc., will use the network capacity and fiber to augment the national expansion of its advanced communications network. The company, which has already established a strong presence in the New York City metropolitan area, with the launch of its brand REDsm is rapidly constructing its robust network to offer integrated voice, data, video, Internet and other secure business services to 33 markets in the United States. The fiber acquired in this transaction will connect key business centers in the east, including Chicago, Cleveland, New York, Washington, D.C., and Atlanta.
"With the incredible capacity and inherent flexibility of Williams' network architecture focused on its requirements, Prism is positioned to project its impressive marketing power into new cities and new lines of business," Janzen said.
Nick Pontikes, president and chief executive officer of Comdisco, said the agreement builds on a long-standing affiliation his company has had with Williams Communications.
"We welcome this opportunity to expand our relationship with Williams Communications. The company offers advanced technology, services and support that will prove invaluable as we introduce RED's high-speed communications services to customers across the country," Pontikes said.
Specifically designed for small and medium businesses, teleworkers and power users, RED utilizes Nortel Networks? digital modem technology over standard copper telephone wires, providing always-on high-speed connectivity for customers to access the Internet at speeds up to 1Mbps. The technology allows simultaneous voice and data transmission over the same copper loop, similar to DSL (digital subscriber line) technology, but with no signal interference.
"As we build momentum toward a strong national presence, we have made it our goal to partner with leaders in the telecommunications market," said Terry Peck, founder and chief executive officer of Prism. "This agreement gives us the technical strength and flexibility to address capacity and other issues as our customer base expands. With the carrier-focused resources of Williams Communications' network unit, we will be able to identify and utilize tools and solutions which offer our customers the most comprehensive communications services available."
Williams Communications' next-generation long-distance network, the fourth largest in the United States, will total 33,000 route miles connecting 125 cities by the end of 2000. The fully integrated architecture of the Williams Multi-Service Broadband Network? couples ATM core switching with advanced optical networking technologies to provide carriers with data, voice, video and Internet services. Williams Communications has received widespread industry recognition for its network architecture - most recently the International Engineering Consortium's InfoVision award.
About Williams Communications Group, Inc. (NYSE:WCG)
Williams Communications Group is the parent company of Williams Communications, North America's only exclusively carrier-focused fiber-optic network and the largest independent source of end-to-end integrated business communications solutions--data, voice or video. Based in Tulsa, Okla., Williams Communications has 9,000 employees primarily in North America, with offices in Europe and Asia and investments in South America and Australia. Approximately 85 percent of the stock of Williams Communications Group is held by Williams (NYSE:WMB) which, in 1985, became the first energy company to harness its core competency as a builder of networks to enable competition in the communications industry. Additional information is available at www.williams.com and www.williamscommunications.com.
About Prism Communication Services, Inc.
Prism Communication Services, Inc., headquartered in New York City, is a subsidiary of Comdisco, Inc. (NYSE:CDO). Through REDSM, its flagship service, Prism is expanding products and geography to become a leading integrated communications carrier, directly offering a total communications solution that includes high-speed connectivity for data, voice, video, Internet and other secure business applications. Designed for small and medium businesses, teleworkers and power users, RED provides tools that enhance its customers' productivity. For more information, call 888-RED-2000 or visit the Web site at www.redconnect.com.
About Comdisco, Inc. (NYSE: CDO)
Comdisco (www.comdisco.com) provides global technology services to help its customers maximize technology functionality, predictability and availability, while freeing them from the complexity of managing their technology. The Rosemont, (IL) company offers a complete suite of information technology services including business continuity, managed network services, and IT control and predictability solutions. Through its subsidiary, Prism Communication Services Inc., Comdisco is developing a high-speed, always-on digital network, which will provide customers with leading-edge connectivity. Comdisco also offers equipment services to key vertical industries, including electronics, communications, laboratory and scientific, and computer-integrated manufacturing. Through its Ventures group, Comdisco is a leader in providing equipment leasing and other financing and services to venture capital backed start-up companies. The company's revenue for the 12 months ended September 30, 1999, was $4.2 billion.
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All trademarks are the property of their respective owners. Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company's annual reports filed with the Securities and Exchange Commission. This news release is not an offer to sell, nor the solicitation of an offer to buy, any securities. Any offer will be made only by means of a prospectus registered with the Securities and Exchange Commission.
Media Relations Contact:
Dana Birkes
Williams Communications, Inc.
(918) 573-4424
dana.birkes@wilcom.com
Patricia GaNun
Prism Communication Services, Inc.
(917) 305-2138
pganun@prismcsi.net
Diane Laux
Comdisco, Inc.
(847) 518-5409
djlaux@comdisco.com
Investor Relations Contact:
David Cordeiro
Williams Communications, Inc.
(918) 573-3142
david.cordeiro@williams.com
Forward-Looking Information
Certain matters discussed in this site, excluding historic information, include forward-looking statements. Although the Company believes such forward-looking statements are based on reasonable assumptions, no assurance can be given that every objective will be reached. Such statements are made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.
As required by such Act, the Company hereby identifies the following important factors that could cause actual results to differ materially from any results projected, forecasted, estimated, or budgeted by the Company in forward-looking statements; (i) risks and uncertainties impacting the Company as a whole primarily related to changes in general economic conditions in the United States; changes in laws and regulations to which the Company is subject, including tax, environmental and employment laws and regulations, the cost and effects of legal and administrative claims and proceedings against the Company or its subsidiaries or which may be brought against the Company or its subsidiaries; conditions of the capital markets utilized by the Company to access capital to finance operations; and, to the extent the Company increases its investments and activities abroad, such investments and activities will be subject to foreign economics, laws, and regulations; (ii) for the Company's regulated businesses, risks and uncertainties primarily relate to the impact of future federal and state regulation of business activities, including allowed rates of return; and (iii) risks and uncertainties associated with the Company's nonregulated businesses primarily related to the ability of such entities to develop expanded markets and product offerings as well as maintain existing markets. In addition, future utilization of pipeline capacity will depend on energy prices, competition from other pipelines and alternate fuels, the general level of natural gas and petroleum product demand and weather conditions, among other things. Further, gas prices which directly impact transportation and gathering and processing through-put and operating profits may fluctuate in unpredictable ways, as may corn prices which directly affect the Company's ethanol business. The businesses acquired in this transaction can be affected by the demand for petrochemicals, ethane recovery economics, weather patterns in the U.S., petroleum product supply and demand, and oil and gas prices. It is also not possible to predict which of many possible future products and service offerings will be important to maintaining a competitive position in the communications business or what expenditures will be required to develop and provide such products and services.
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