QWEST COMMUNICATIONS AND INVESTOR GROUP COMMIT $251 MILLION TO ADVANCED
RADIO TELECOM TO EXPAND ITS HIGH-SPEED LOCAL WIRELESS NETWORK
Qwest To Acquire 19 Percent Interest in ART and Take Next Step In Local
Broadband Access Plans; Investment Accelerates ART's Broadband IP
Network Deployment
June 1, 1999---Qwest Communications International Inc. (Nasdaq: QWST),
the Internet communications company, Advanced Radio Telecom (ART) Corp.
(Nasdaq: ARTT) and a group of high-tech investment funds today announced
that they have signed a definitive agreement for a $251 million equity
investment that will expedite the deployment of ART's high-speed
wireless network. For Qwest, the announcement illustrates the company's
aggressive, evolving plans to grow its local broadband connectivity
options and deliver end-to-end, next-generation communications services
to customers.
Qwest will invest $90 million for a 19 percent stake in ART to help
support the construction of ART's fixed wireless networks. The other
investors include syndicate leader Oak Investment Partners, $40 million;
MeriTech Capital Partners, $25 million; Advent International, $20
million; Columbia Capital, $20 million; Accel Partners, $15 million;
Brentwood Venture Capital, $15 million; Worldview Technology Partners,
$15 million; Bessemer Venture Partners, $8 million; and Adams Capital
Management, $3 million.
Qwest and ART have agreed to integrate ART's local broadband wireless
networks with Qwest's Internet Protocol(IP)-based fiber-optic network.
ART will provide Qwest broadband local wireless capacity, and Qwest will
be ART's exclusive provider of network backbone. The two companies will
also co-locate equipment and coordinate joint marketing initiatives to
businesses. ART currently offers commercial wireless Internet services
to businesses in the Seattle, Portland, Ore., and Phoenix metropolitan
areas.
With the equity capital infusion, ART will be able to significantly
accelerate the implementation and evolution of its business plan. The
company plans to build broadband wireless high-speed metropolitan area
networks in 40 of the top 50 markets in the United States over the next
two years. ART's 38GHz spectrum licenses and high-speed data
communications infrastructure combined with Qwest's reliable, scalable
18,500-mile network in the United States, will be able to deliver
broadband network applications and services to more than 50 percent of
businesses in the U.S.
The investors will advance $50 million through a short-term senior note,
which will be retired at closing in exchange for equity. The companies
anticipate closing the transaction in the third quarter of 1999 subject
to ART shareholder approval, Hart-Scott-Rodino approval, consents to
certain material amendments and other customary conditions. Each
investor will acquire preferred stock convertible into ART common stock.
The preferred shares will be purchased at $80 per share and will be
convertible on a 10-to-one basis. The investors' combined voting
interest, with respect to the new investment, is limited to 45 percent
of ART's outstanding voting securities.
"Our investment in ART will provide Qwest with another high-end,
last-mile broadband access solution to support the use of Internet
applications and services by our customers," said Joseph P. Nacchio,
Qwest chairman and CEO. "The ART wireless technology is an outstanding
addition to the fiber-optic cable we are placing in 19 cities to
directly connect business customers to our Internet-protocol network."
Qwest also has made investments and plans to offer digital subscriber
lines in a number of key U.S. markets later this year.
"This is a 'grand slam' for all the companies involved, as well as the
ART shareholders," said Henry "Harry" C. Hirsch, ART chairman and CEO.
"With a strong equity capital base, a very sophisticated group of
investors in information technology and communications, and Qwest as our
strategic investor and partner, we can now implement our vision of
satisfying the exponentially growing business demand for end-to-end
broadband IP communications services. Qwest is an outstanding partner
for ART because of its leadership in Internet communications and the
compatibility of its state-of-the-art data network with ours."
Representatives of Qwest Communications and Oak Investment Partners will
join ART's board of directors following the closing.
About the Companies
Qwest Communications International Inc. (Nasdaq: QWST) is a leader in
reliable and secure broadband Internet-based data, voice and image
communications for businesses and consumers. Headquartered in Denver,
Qwest has more than 8,500 employees working in North America, Europe and
Mexico. The Qwest Macro Capacity® Fiber Network, designed with the
newest optical networking, will span more than 18,500 route miles in the
United States when it is completed by mid-1999, and an additional
315-mile network route that will be completed by the end of the year. In
addition, Qwest and KPN, the Dutch telecommunications company, have
formed a venture to build and operate a high-capacity European fiber
optic, Internet Protocol-based network that has 2,100 miles and will
span 9,100 miles when it is completed in 2001. Qwest also has nearly
completed a 1,400-mile network in Mexico. For more information, please
visit the Qwest web site at www.qwest.com <http://www.qwest.com>.
Advanced Radio Telecom is a facilities-based, broadband ISP providing a
direct connection between the customer premises and the Internet. ART
owns and operates metropolitan area networks in Seattle, Portland and
Phoenix using fixed wireless and fiber optic technologies. ART owns or
manages 38GHz spectrum licenses in more than 210 markets in the United
States, including 49 of the top 50 and 90 of the top 100 markets. ART
also owns 26GHz and/or 38GHz spectrum licenses in several European
countries. ART offers a full range of Internet services including
dedicated Internet access at speeds up to 10Mbps, e-mail, web hosting
and web design, domain name server (DNS) registration, IP Fax and more.
For more information, please visit ART's web site at www.art-net.net.
Oak Investment Partners is a private partnership that focuses on
financing emerging leaders in the information technology and e-commerce
areas. Oak was founded in 1978 and has since organized eight
partnerships with total commitments of over $1.6 Billion. Examples of
past investment successes include companies such as: Exodus, Inktomi,
Parametric, Polycom, Synopsys, and Wellfleet. Oak's focus in the
wireless communications area includes investments in Metawave
Communications, Airspan, Triton and Wireless Facilities Inc. For more
information, please visit Oak's web site at www.oakinv.com.
This release may contain forward-looking statements that involve risks
and uncertainties. These statements may differ materially from actual
future events or results. Readers are referred to the documents filed by
Qwest and ART with the SEC, specifically the most recent reports which
identify important risk factors that could cause actual results to
differ from those contained in the forward-looking statements, including
failure to consummate the transaction, potential fluctuations in
quarterly results, dependence on new product development, rapid
technological and market change, Qwest's failure to complete the network
on schedule and on budget, ART's ability to implement its network,
financial risk management and future growth subject to risks, ability to
achieve Year 2000 compliance, competition and customer demand, ART's
ability to meet capital requirements and other financial risks, and
adverse changes in the regulatory or legislative environment. Qwest and
ART undertake no obligation to review or confirm analysts' expectations
or estimates or to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
The Qwest logo is a registered trademark of Qwest Communications
International Inc. in the U.S. and certain other countries.
# # #
Contacts for ART: Contacts for Qwest:
Media: Media
Jeanne Snell Tyler Gronbach
(303) 771-1666 (303) 992-2155
snellPR@worldnet.att.net tyler.gronbach@qwest.com
Investors: Investors:
Bob McCambridge Lee Wolfe
(425) 688-8700 (800) 567-7296
bobm@artelecom.com IR@qwest.com
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