Infrastructure Buildout Continues (Part II) - JGH
June 26, 2000 17:41
Williams Communications Unveils Expanded Strategy to Enhance Service to Carriers
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TULSA, Okla., June 26 /PRNewswire/ -- Williams Communications (NYSE: WCG) today unveiled a new set of strategic initiatives, building upon its next- generation fiber-optic network to provide carriers a unique package of value- added services.
In support of this strategy, the Williams Communications Board of Directors has approved expenditure of nearly $1 billion over the next several years to build dedicated data centers, expand its network colocation facilities and to scale up its Internet Protocol (IP) network. These moves will reaffirm the company's role as a leader in optical networking.
The new capital outlay will pay for next-generation transport and switching equipment for IP and optical wave capacity and will fund the accelerated build-out of Williams colocation and data center facilities -- typically 50,000 square feet or more in size -- in major cities around the country.
Expansion projects previously announced this year that complement Williams' long-haul U.S. network include building local transport facilities in 50 top U.S. markets, securing capacity on undersea fiber and obtaining stakes in networks in Europe and Asia -- all designed to make the Williams network available on a local-to-global basis.
"When these new IP and data center projects are coupled with the rapidly increasing demands of the carrier marketplace, we believe our targeted long- term market opportunity is greater than we previously projected," said Howard Janzen, president and chief executive officer of Williams Communications.
"Our multi-service network is designed to support a full range of services both for existing carriers and for emerging service providers," Janzen said. "This new plan underscores our intent to meet the demand for high-quality bandwidth products on a local-to-global basis as well as the expanding needs of our carrier customers for IP, data center and colocation services.
"As we have previously noted, the tremendous demand for bandwidth services, including colocation for customers' equipment, has at times impacted the industry's ability to promptly turn up service. We are addressing our backlog of orders by accelerating our deployment of additional network facilities and technical resources."
Scott Schubert, senior vice president and chief financial officer of Williams Communications, said the company expects to support its plans to capture a significant share of new and expanding markets by increasing its capital expenditure program for 2000 and 2001 to $5.8 billion.
"To prudently fund the capital needs associated with this expanded business plan, the company expects to access the capital markets during 2000," Schubert said. "These actions are expected to allow the company to expand its revenue potential over time.
"Increased startup costs associated with these expansion opportunities, regulatory delays of SBC Communications' long distance relief in Texas and our temporary provisioning issues will affect our near-term results. However, we do not expect these issues to impact our ability to be EBITDA positive in our reported results by the end of 2001," Schubert said.
With some 28,000 miles of its planned 33,000-mile network deployed, Williams Communications already has the largest next-generation network in the country. Williams is deploying a multi-service network based on optical switching technology. This architecture provides more efficient use of bandwidth, rapid restoration, robust product support and high quality of service thresholds. The construction of the company's nationwide network, expected to be completed ahead of schedule by the end of this year, is already fully funded.
Internet Protocol Network
In support of its Internet Service Provider customers, Williams Communications will utilize the new IP network to secure its role as a high- speed Tier 1 Network Service Provider on an international level.
The platform for IP and Web-based capabilities is being developed in conjunction with a number of strategic allies who, together with Williams, expect to deploy a large-scale, flexible Internet infrastructure.
The new phase of Williams' strategy is consistent with the company's core competence of enabling a variety of carriers such as Internet Service Providers, Application Service Providers, next-generation communications companies -- and other companies that use bandwidth as an integral part of their product or service offering -- to use their own innate capabilities to achieve greater market focus.
Data Centers
A portion of the new funding will address the demand by Williams Communications' emerging customer base for significant space adjacent to the company's network equipment. During the past two years, Williams has funded and built colocation and data center facilities totaling more than 1.25 million square feet. The new capital project will be used in part to construct and equip new or expanded colocation and data center facilities, increasing space by nearly 700,000 square feet.
Data center colocation offers customers immediate and efficient access to Williams Communications' network. This allows quicker provisioning, faster time to market and capital savings for providers offering their own customers Internet access, media streaming and broadband services.
These data centers will house servers, storage systems and network elements for customers who need to outsource management services such as hardware, software, network connectivity and operations. Williams Communications data centers offer customers scalability, capital savings and an ability to focus on their own core business objectives.
Conference Call
Company executives will discuss details of this announcement, and short- term and long-term implications, during a conference call scheduled for 8 a.m. (EDT) on Tuesday, June 27. A replay of this conference will be available at the company's Web site (www.williamscommunications.com/investors.)
About Williams Communications Group, Inc.
Williams Communications, through its subsidiaries, is 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 had revenues of $2 billion in 1999 and today has more than 9,500 employees primarily in North America, with offices in Europe and Asia and investments in South America and Australia. Approximately 85 percent of WCG stock 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.williamscommunications.com and www.williams.com.
Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: the ability to complete systems within currently estimated time frames and budgets; the Company's ability to deploy sophisticated technologies on a local-to-global basis; the Company's ability to expand and enhance its network and respond to customer demands and industry changes; the Company's ability to achieve revenues from products and services that are in the early stages of development or operation; the Company's ability to manage its growth; the Company's ability to raise funds for operations; competition and pricing pressure; regulatory enactments and changes in the United States and other countries; changes in business strategy; the successful integration of newly acquired businesses; the impact of technological change; adverse economic or political events; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission, including its Registration Statement in Form S-1.
All trademarks are the property of their respective owners.
Contacts:
Gil Broyles (media inquiries) Patricia Kraft (investor inquiries)
Williams Communications, Inc. Williams Communications, Inc.
(918) 573-4740 (918) 573-0649
gil.broyles@williams.com patricia.kraft@williams.com
SOURCE Williams Communications Group, Inc.
/CONTACT: media, Gil Broyles, 918-573-4740, or gil.broyles@williams.com,
or investors, Patricia Kraft, 918-573-0649, or patricia.kraft@williams.com,
both of Williams Communications, Inc./
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 875550/
/Web site: williamscommunications.com
williams.com
williamscommunications.com /
(WCG WMB) |
