Telegroup® Dramatically Expands Capacity Between U.S. and Europe
FAIRFIELD, Iowa, April 23, 1998, Telegroup, Inc. (NASDAQ: TGRP - News) announced that it has increased its ownership of transatlantic bandwidth capacity to more than 30 times its current level by purchasing an STM-1 on the cable system GEMINI. The ability to connect Telegroup's international gateway hubs in New York City and London through the GEMINI STM-1 will enable substantially more traffic to be carried on Telegroup's own network between the United States and Europe, thus reducing the Company's cost and improving its competitive position in Europe.
"GEMINI brings international call termination in the United Kingdom and Europe to the very competitive levels currently found only in the U.S.," says Eric E. Stakland, Telegroup's Vice President for International Marketing and Operations.
The STM-1 will permit not only heavier volume, but also more robust service. GEMINI's sophisticated three-ring SDH loop architecture provides instant backup routing capability in case of cable failure, resulting in uninterrupted international voice and data services for customers. Capable of carrying 2400 voice calls simultaneously, the STM-1 will be an important link in Telegroup's expanding international network. Telegroup plans to activate GEMINI by May 15th of this year.
The STM-1 purchase increases the amount of Telegroup's leased and owned capacity by 450% worldwide, including transatlantic and transpacific circuits and capacity in markets such as Asia, Australia, and Europe. This expansion of capacity is part of Telegroup's strategy to increase its global network to better serve Telegroup's business and residential customers around the world.
Telegroup is a leading global provider of long distance telecommunications services. The company offers a broad range of discounted international, national, and enhanced telecommunications services to over 200 countries, to small- and medium-sized business and residential customers. In addition, Telegroup offers value-added wholesale services to over forty domestic and international telecommunications carriers. The company has achieved its significant international market penetration by developing what it believes to be one of the most comprehensive global sales, marketing, and customer service organizations. Telegroup operates a reliable, cost-effective, digital, facilities-based network, the Telegroup Intelligent Global Network(, which consists of a central network operating center, twenty-one switches, five enhanced service platforms, owned or leased capacity on nine digital fiber-optic cable links, and leased parallel data transmission capacity connecting Telegroup's switches to each other and the networks of other national and international carriers. Telegroup had revenues of $337 million in 1997.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This news release contains statements which are not historical facts and may be considered forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including expansion of Telegroup's network, improvement of Telegroup's competitive position, reduction of Telegroup's costs, and achievement of Telegroup's business plan. Telegroup's actual results might differ materially due to numerous factors including, without limitation, the Company's success in developing its business plan, and acquiring additional financing needed to meet this plan, foreign currency fluctuations, termination of certain operating agreements, and changes in tax law. Those and other risks are described in the Company's filings with the Securities and Exchange Commission.
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