Amsterdam, The Netherlands, April 13, 1999 - KPNQwest today announced the finalization of a joint venture between KPN, the Dutch telecommunications company, and Qwest Communications International Inc. of Denver, Colorado. The venture also announced that it expects to raise approximately $800 million (U.S.) of debt to complete construction of the KPNQwest EuroRings fiber-optic network.
Analysts estimate that communication services in western Europe, the addressable market for the KPNQwest venture, will grow to approximately $224 billion by the year 2001, with five countries - Germany, France, United Kingdom, Belgium and The Netherlands - representing 65 percent of the total.
The venture is already offering a host of Internet Protocol-based, fiber-optic broadband network services spanning 2,100 miles (3,500 kilometers) in Europe. KPNQwest has 650 employees and its headquarters are in The Netherlands. KPN has contributed 2,100 miles of network, transatlantic capacity and cash to the venture. Qwest has contributed the resources of EUnet, one of the leading European commercial Internet Service Providers (ISP) with nearly 84,000 customers and operations in 14 countries, transatlantic capacity and cash.
The venture is close to completing two of the six state-of-the-art self-healing rings and the additional financing it intends to secure will support the construction of the final four rings. When complete in 2001, the pan-European network is expected to cover 9,100 miles (14,640 kilometers) and connect more than 40 major cities, providing broadband and Internet-based communication services to customers.
"The EuroRings network, fully owned and operated by KPNQwest, provides customers unmatched levels of reliability, scalability and security," said Wim Dik, KPN chairman and CEO. "When coupled with the Qwest U.S. network, customers will have - for the first time - a truly full functional state-of-the-art, seamless intercontinental network."
"We are extremely pleased with the speed at which our venture has begun to serve customers," said Joseph P. Nacchio, Qwest chairman and CEO. "As we expand globally, we are forging the best of our resources in Europe with those of KPN to deliver to customers a comprehensive package of broadband and Internet-based communications services."
Customers for the venture will include multi-national and other firms worldwide that want integrated voice, data and image communications; and communications companies that want to buy wholesale network capacity. Services will eventually include IP-based voice communications; high-speed Internet access, intranets, extranets, and Web hosting; IP-based virtual private networks and ATM (Asynchronous Transfer Mode) and IP transit services for the wholesale market.
The KPNQwest joint venture is equally owned by KPN and Qwest. The joint venture brings together the state-of-the-art fiber-optic networks of the two partners and the Internet services expertise and customer base of EUnet International. The venture will have 650 employees formerly employed by KPN INS and EUnet International. The venture plans 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. This network will interconnect with Qwest?s 18,500-mile fiber-optic network in the U.S. The KPNQwest venture will offer a full range of broadband and IP-based communications services.
This press release is not an offer of securities for sale in the United States. Securities of KPNQwest may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities of KPNQwest to be made in the United States will be made by means of a prospectus that may be obtained from KPNQwest and that will contain detailed information about KPNQwest and management, as well as financial statements. This release may contain forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Important risk factors that could cause actual results to differ from those contained in the forward-looking statements include potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to complete the network on schedule and on budget, financial risk management and future growth subject to risks, KPNQwest's ability to achieve Year 2000 compliance, and adverse changes in the regulatory or legislative environment. KPNQwest undertakes 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.
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