--OT Tricom Signs Contract with Motorola for 150,000 LINE CDMA Buildout; Announces Timetable for Deployment
SANTO DOMINGO, Dominican Republic, Aug. 18 /PRNewswire/ -- TRICOM, S.A. (NYSE: TDR - news), a diversified
telecommunications services provider, announced today the selection of Motorola, Inc's Cellular Infrastructure Group (CIG)
(NYSE: MOT - news) 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 Republi |
