AT&T Canada and PRIMUS Telecommunications Announce Consumer Market Strategic Alliance
TORONTO and MCLEAN, Va.--(BUSINESS WIRE)--May 31, 1999--
PRIMUS Becomes 2nd Largest Alternative Residential Long Distance
Carrier in the Canadian Market With Purchase of Assets
and Over 450,000 Long Distance and ACC Internet Customers
AT&T Canada Corp., Canada's largest facilities-based competitive voice, data and Internet telecommunications provider, and PRIMUS Telecommunications Group, Incorporated (Nasdaq: PRTL), a global facilities-based voice, data and Internet telecommunications company, announced the consummation of a comprehensive strategic alliance in the residential long distance consumer market in Canada.
The agreement is based on four key elements, including: the sale by AT&T Canada and ACC Corp. of their residential long distance customer base and consumer assets and ACC residential Internet customers and network to PRIMUS; a multi-year wholesale network services agreement between AT&T Canada and PRIMUS whereby AT&T Canada will provide underlying network services in Canada to PRIMUS and will provide domestic termination for PRIMUS's global customers; an interim services contract for up to 12 months to allow for seamless transition in which AT&T Canada will continue to provide customer support services to the customer base transferred to PRIMUS; and a licensing agreement for PRIMUS to use AT&T Canada's bill face for six months of the transition period. In addition, AT&T Canada will work with its current affinity partners to put in place the framework for PRIMUS to further develop the current affinity programs with several distinguished national affinity partners.
The assets and residential long distance customer base of AT&T Canada and ACC Corp., will be consolidated into PRIMUS Canada, PRIMUS's wholly-owned operating subsidiary in Canada. AT&T Canada's residential long distance business includes: the residential long distance customer base (including ACC Long Distance customers) and employees directly involved in supporting the residential business. The Internet customers of ACC Canada are also included in this transaction. The purchase by PRIMUS is for a consideration of C$57 million, comprised of cash and a note. PRIMUS also assumes certain liabilities.
"With over 450,000 voice and Internet customers, superior customer service and capabilities, access to AT&T Canada's domestic long distance network, and strong affinity programs in place, we knew that this was the best growth opportunity for us to pursue our expansion plans in Canada," said Ted Chislett, President of PRIMUS Canada. "We intend to continue to grow our Canadian business and enhance PRIMUS's offerings of voice, data and Internet services to residential and business customers throughout Canada using our extensive global network, while providing the level of service and telecommunications quality that our customers have come to expect."
"This deal is consistent with the AT&T Canada strategy of partnering with strong companies to deliver more and better services to customers as we expand our business in Canada. It will strengthen our focus on the market for all business services, including local and long distance voice, data, Internet and e-commerce services. It also enables us to serve residential customers in our role as a leading wholesale supplier of network services for the residential long distance market, and to maintain our position as a direct provider of consumer Internet services in our pending merger with MetroNet and NetCom Canada," said Don Morrison, President, Consumer, Small Business and Wholesale, AT&T Canada.
Commenting on the strategic alliance with AT&T Canada, Yousef B. Javadi, PRIMUS's Chief Operating Officer for North America, said, "We are extremely pleased that AT&T Canada will join with us in serving these customers and we are dedicated to ensuring that long distance and Internet customers will continue to receive the industry's best quality and value. Following our March 1999 acquisition of London Telecom, a Canadian independent long distance carrier, and February 1999 acquisition of GlobalServe, a leading Canadian Internet Service Provider (ISP), PRIMUS Canada with this transaction will now have a base of over 650,000 voice customers and over 50,000 Internet/data customers. Importantly, we now rank as the second largest alternative residential long distance carrier in Canada's consumer market and the fifth largest ISP. This acquisition represents an important step as PRIMUS executes its strategy of being a full service voice, data and Internet carrier with critical mass in eight major markets around the world."
PRIMUS will provide employment opportunities for AT&T Canada employees that support the residential long distance business, including those at the award-winning customer care center in Edmundston, New Brunswick in order to provide continuity of service and seamless transition for customers.
About AT&T Canada
AT&T Canada Corp. is Canada's largest facilities-based competitive voice, data and Internet telecommunications provider. Deploying the most advanced fibre-optic networking and digital switching platforms, AT&T Canada offers customers across the country a full suite of local and long distance voice, data and Internet services - with excellent customer service, sales and service locations from coast-to-coast, and competitive pricing. Visit AT&T Canada's web site, www.attcanada.com, for more information about the company.
About PRIMUS
PRIMUS Telecommunications Group, Incorporated is a global facilities-based telecommunications company providing domestic and international long-distance voice, data, Internet, private network and value-added services. The Company provides services through an extensive global network of owned and leased transmission facilities, including ownership interests in 23 undersea fiber optic cable systems, 12 international gateway switches, a satellite earth station and a variety of operating relationships that allow the Company to deliver traffic worldwide. Founded in 1994 and based in McLean, Va., the Company, prior to this transaction, had an annual revenue run rate in excess of $500 million and served more than 650,000 corporate, small- and medium-sized business, residential and telecommunications carrier customers located in the North America, Europe and the Asia-Pacific regions of the world. News and information are available at the Company's Website at www.primustel.com. |
