Tricom Signs Contract with Motorola for 150,000 Lines
CDMA Buildout; Announces Timetable for Deployment
PR Newswire - August 18, 1998 09:14
SANTO DOMINGO, Dominican Republic, Aug. 18 /PRNewswire/ -- TRICOM, S.A. (NYSE:
TDR), a diversified telecommunications services provider, announced today the selection of
Motorola, Inc's Cellular Infrastructure Group (CIG) (NYSE: MOT) as the infrastructure provider of
CDMA (Code Division Multiple Access) technology and equipment for its WLL (Wireless Local
Loop) and PCS buildout plans. The four year contract provides for the installation of 150,000
wireless subscribers. The selection of Motorola CIG's WiLL(R) technology was the last step
necessary in order for the Company to deploy the system.
The WiLL(R) system will accelerate penetration of the local access market in the Dominican
Republic at significantly lower costs compared to deploying copper lines. The Company expects to
considerably increase its market share as it will now have the ability to provide telephony services to
large areas, enabling it to use mass marketing techniques to target underserved markets. There are
currently approximately 750,000 local access lines in service in the Dominican Republic,
representing a penetration rate of only 9%.
"Our goal in selecting to grow with the WLL technology is to offer our customers a reliable, cost
effective product, substantially reducing the waiting period for a telephone line" said Arturo
Pellerano, President and Chief Executive Officer of TRICOM. "In the highly underserved
Dominican market, where only 9 out of every 100 persons have a home telephone, this should
prove to be a strong catalyst for market growth and increased penetration."
CDMA technology uses codes to differentiate subscribers' phone conversations, allowing for the
most efficient use of the radio spectrum, at the same time providing enhanced voice quality,
comparable to traditional copper wire systems. Among the benefits of this technology are its ability
to offer ubiquitous coverage, rapid installation, a scalable network with redeployable equipment,
reduced maintenance costs, and mobility. "TRICOM has consistently been a leader in providing
innovative services," said Woody Ritchey, Vice-President and General Manager of Motorola CIG's
Americas Cellular Infrastructure Group. "Motorola's CDMA WiLL(R) system provides a highly
effective platform for TRICOM to quickly offer its customers high- quality digital services on a
larger geographic scale than would otherwise be possible."
The Company expects to have its Wireless Local Loop in operation on a limited basis, in the capital
city of Santo Domingo by the first quarter of 1999, and plans to expand into five other cities during
the rest of 1999. The Company anticipates that the first phase of the Wireless buildout plan will be
completed at a cost of US$12.6 million, and will deploy capacity to connect approximately 36,000
wireless subscribers by the end of 1999. Concurrently with the Wireless Local Loop service, the
Company will be able to provide customers with a fully mobile PCS offering.
The costs to the Company of installing local access lines using WLL technology are estimated to be
approximately 20% less than the costs of traditional copper line installation. Additional savings are
also expected in the maintenance costs, as well as on the operational expenses required for
installation and redeployment.
The total amount of the contract, US$52 million is considerably lower than was originally anticipated
by the Company, and will be invested in equal parts, over the next four years. The deployment of
the WLL is expected to take place in three stages over the same period. The first stage, covering
60% of the capital city of Santo Domingo, with a population of approximately 2.1 million, is
expected to be operational by the end of 1998. The second stage, covering five additional cities,
comprising a total population of approximately 1.1 million, should be operational by the end of the
second quarter of 1999. The third and final stage, to be implemented over the course of the
following two years, will increase coverage to seven additional cities, at the same time increasing
capacity in the previously covered cities. During these three stages, Motorola will provide TRICOM
with installation teams for each network component, staff training, and network testing. Motorola
will also provide TRICOM with dedicated, in-country technical support and maintenance, and other
services.
MOTOROLA, INC. is one of the world's leading providers of wireless communications,
semiconductors, and advanced electronic systems, components and services. Motorola's 1997
sales were $29.8 billion.
TRICOM is the sole alternate provider of diversified telecommunications services in the Dominican
Republic. Since it began operations in 1992 as a low-cost international long distance service
provider, the Company's services have expanded to include basic local service, national long
distance, cellular, paging and internet access. TRICOM is the first Dominican company to issue
securities on the New York Stock Exchange.
This news release contains certain "forward-looking statements" (as described in Section 21E of the
Securities Exchange Act of 1934) that are based on the beliefs of the Company's management, as
well as assumptions by, and information currently available to, the Company's management. The
words "anticipates," "believes," "estimates," "expects," "plans," "intends" and similar expressions are
intended to identify these forward-looking statements, but are not the exclusive means of identifying
them. These forward-looking statements reflect the current views of the Company or its
management and are subject to certain risks, uncertainties and contingencies which could cause the
Company's actual results, performance or achievements to differ materially from those expressed in,
or implied by, these statements. In particular such risks include, but are not limited to, the following
factors: competition; declining rates for international long distance traffic; opposition to increased
rates for basic local service; the Company's significant capital expenditure requirements and its need
to finance such expenditures; the inability of the Company to expand its local access line network in
a timely manner and within the amount budgeted for such capital expenditure program; the inability
of the Company to manage effectively its rapid expansion; the continued growth of the Dominican
economy, demand for telephone services in the Dominican Republic and moderation of inflation;
and the continuation of a favorable political and regulatory environment in the Dominican Republic.
SOURCE Tricom, S.A.
/CONTACT: Jaime Garcia of TRICOM, S.A., 809-476-4054, or
jgarcia@tricom.com.do; or Robin Weinberg of DEWE ROGERSON, 212-688-6840, or
rweinberg@dewerogerson.com, for TRICOM/ |
