BayanTel Breaks Ground for Major Network Expansion

Bell Atlantic's Philippines joint venture to add up to 400,000 lines

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NEW YORK -- Bayan Telecommunications Holdings Corp. (BayanTel), Bell Atlantic's joint venture in the Philippines, has broken ground for a network expansion that could more than double the number of lines in its telephone network to over 800,000, depending on demand.

BayanTel, the leading new telecommunications operator in the Philippines, is the first of 11 new local exchange operators to be permitted to expand into new areas, largely because the company exceeded its original network commitments.

Bell Atlantic is the strategic partner in BayanTel and contributes technical and management guidance.

Bell Atlantic is celebrating its partnership through its corporate sponsorship of the Smithsonian Institution's Festival of American Folklife in Washington, D.C., which this year is commemorating the centennial of The Philippines' independence. The festival is taking place through the July 4 weekend.

In 1993, the National Telecommunications Commission (NTC) of the Philippines sought to stimulate competition and infrastructure development by apportioning service areas to 11 new carriers to compete against the 60- year old Philippine Long Distance Telephone Company. The new carriers were required to install 300,000 to 700,000 lines within three years to receive a license for an international gateway facility. BayanTel placed 330,000 lines in its service areas in the metropolitan Manila and Bicol regions 15 months ahead of deadline.

As a result, the NTC decided last November to allow BayanTel to enter new areas and build 150,000 lines in Manila and suburban Navotas. And in February, the NTC approved construction of approximately 250,000 new lines in 13 portions of the Visayas and Mindanao, with installation dependent only on market demand.

"At BayanTel, we believe the Filipino consumer will be best served by allowing the most efficient new players to expand beyond their initial service areas, and we are pleased that the NTC has recognized this," said BayanTel President Rod Salazar.

"We realized early on that our long-term competitive edge would be a strong local exchange network, which is the foundation for national and international services, and so construction of this network has been our primary focus," Salazar said.

Bell Atlantic International Telecommunications Group President John F. Killian said, "BayanTel's performance demonstrates Bell Atlantic's belief that, as markets worldwide open to new technology and competition, we can increase value globally by building on our core competencies." Killian is a member of the BayanTel board of directors.

BayanTel will fund the network expansion with the proceeds from a private placement of $130 million in convertible preferred shares with investors from the U.S., Europe and Asia.

BayanTel (Bayan Telecommunications Holdings Corp.) is the leading new telecommunications operator in the Philippines, providing a full range of communications services, including local exchange, domestic and international long distance, data, pay phone, public calling office and security monitoring services. BayanTel is also the single largest shareholder in national wireless provider Express Telecommunications Corp. (Extelcom). BayanTel is owned by the Lopez Group, led by Benpres Holdings Corp., and strategic partner Bell Atlantic. Other major investors are the Asia Infrastructure Fund and Chase Capital Partners. 

Bell Atlantic -- formed through the merger of Bell Atlantic and NYNEX -- is at the forefront of the new communications and information industry. With more than 41 million telephone access lines and 6.7 million wireless customers worldwide, Bell Atlantic companies are premier providers of advanced wireline voice and data services, market leaders in wireless services and the world's largest publishers of directory information. Bell Atlantic companies are also among the world's largest investors in high- growth global communications markets, with operations and investments in 23 countries.

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