AT&T Reaches Agreements to Form Commercial Joint Ventures with Five Cable Operators Joint ventures will offer advanced communications services for customers of <>
January 11, 1999
NEW YORK, AT&T today
announced that it had reached
agreements with five
Tele-Communications, Inc. (TCI) affiliates
to form separate joint ventures to offer
customers advanced communications
services. AT&T expects to finalize joint
ventures with Bresnan Communications,
Falcon Cable TV, Insight Communications,
InterMedia Partners and Peak Cablevision
in early 1999, begin piloting the new
services later in the year and then begin
commercial operations in the year 2000.
The joint ventures will offer customers
new communications services that feature
multiple phone lines per household, along
with options such as conference calling,
call waiting, call forwarding and individual
message centers for family members.
In June 1998, AT&T announced plans to
merge with TCI, the country's second
largest cable operator, passing more than
17 million U.S. households via TCI's cable
plant.
The announced telephony joint ventures
combined will reach an additional five
million U.S. households.
"These joint ventures bring us another
step closer to our goal of giving U.S.
consumers a choice in local phone
service," said C. Michael Armstrong,
chairman and CEO of AT&T. "It's a
facilities-based approach that will allow us
to deliver on our commitment to provide
all-distance telephony service to our
customers."
AT&T, which expects to own between 51
percent and 65 percent of each of these
joint ventures, will have long-term
exclusive rights to offer communications
services over the systems of each of the
five operators in return for one-time
payments to be made when the systems
meet certain performance milestones.
AT&T expects the total of these
payments to be in the tens of millions of
dollars. In addition the operators will
receive ongoing monthly telephony
subscriber payments.
Each cable company will bear the cost of
upgrading its cable system to support
two-way communications. Upgrade efforts
are currently underway at each of the
five cable companies and most expect to
complete the process by the end of the
year 2000.
The telephony joint venture, in each
case, will bear the cost of adding
communications equipment when a
customer signs up for service. AT&T
estimates those costs will eventually
range from $300 to $500 per home,
depending on whether the customer
already subscribes to the cable operator's
digital video service.
Each telephony joint venture will report to
Leo Hindery, Jr., the current president of
TCI who will head AT&T's new cable
services operations once the AT&T-TCI
merger is complete.
The five cable companies operate in
various regions of the country.
Following completion of its cable system
joint venture with TCI, Bresnan
Communications will serve more than
600,000 customers in Michigan,
Minnesota, Wisconsin and Nebraska and
will pass approximately 900,000 homes.
The company is headquarterd in White
Plains, N.Y.
"I'm excited that our broadband platform
will now be associated with the AT&T
brand," said William J. Bresnan, president
and founder of the cable and
telecommunications company. "Through
this partnership, we'll be able to deliver an
even broader range of telecommunications
services."
Falcon Cable TV operates systems in 26
states, including Washington, Oregon and
California. It serves more than one million
customers, passes approximately 1.6
million homes and is headquartered in Los
Angeles.
Marc B. Nathanson, chief executive
officer and founder of Falcon, said, " This
is a win-win deal for everyone. For us, it
means an expansion into
telecommunications services. For AT&T, it
means access to the local residential
phone market. And for consumers, it
means the ease of one-stop shopping for
all cable and telecommunications services
in small and medium sized communities
throughout the country."
Insight Communications, which also has
customers outside its partnership with
TCI, collectively has more than 500,000
customers and passes more than 800,000
homes in seven states, including Illinois,
Indiana, Ohio and California and is based
in New York City.
"These ventures represent a new era in
the cable and telecommunications
industries," said Michael S. Willner, chief
executive officer of Insight. "We're
pleased to be a part of the convergence
of these industries with the undisputed
leader in telecommunications services."
InterMedia Partners is based in Nashville
and serves more than one million
customers and passes nearly 1.6 million
homes in four states -- Tennessee,
Kentucky, Georgia and South Carolina.
"I believe this is an exceptional growth
opportunity for InterMedia Partners and
AT&T," said Robert J. Lewis, managing
general partner and CEO for InterMedia
Partners. "It allows us to fully utilize our
already upgraded network to serve our
customers with a single broadband
platform for cable and telecommunications
services, which they have been seeking."
Peak Cablevision serves more than
100,000 customers and passes 180,000
homes primarily in Utah and Oklahoma. Its
headquarters are in Englewood, Co.
Donne Fisher, president of Peak, said,
"We're pleased to be able to offer our
customers access to AT&T's quality
services and its reputation for reliability."
The completion of the joint ventures are
subject to a number of conditions
including execution of definitive
documentation.
The foregoing are "forward-looking
statements" which are based on
management's beliefs as well as on a
number of assumptions concerning future
events made by and information currently
available to management. Readers are
cautioned not to put undue reliance on
such forward looking statements, which
are not a guarantee of performance and
are subject to a number of uncertainties
and other factors, many of which are
outside AT&T's control, that could cause
actual results to differ materially from
such statements. For a more detailed
description of the factors that could
cause such a difference, please see
AT&T's filings with the Securities and
Exchange Commission. AT&T disclaims any
intention or obligation to update or revise
any forward-looking statements, whether
as a result of new information, future
events or otherwise.
SOURCE AT&T |
