Telegroup Concludes Agreement with Sungwoo to Service Korean Telecom
Market
Telegroup Pioneers Another Newly Deregulated Market
Partners To Further Develop Asian Market
FAIRFIELD, Iowa, July 13, 1998 Telegroup, Inc. (Nasdaq: TGRP) has signed an agreement to become the global telecommunications
partner of Sungwoo Information and Communications Co., Ltd., one
of the first Korean companies licensed as an alternative telecommunications
provider in Korea's newly-deregulated telecommunications market.
"We chose Telegroup as a partner over other global networks because
of their track record," said Dr. Manjin J. Kim, Executive Vice
President, Sungwoo. "Telegroup has been a leader in aggressively
entering newly-deregulated markets and quickly expanding their
presence, as shown by their success in Europe and Australia. Telegroup's
approach is an excellent strategic fit for Sungwoo as we develop
our own quality profile in business and residential markets."
Telegroup's Senior Vice President, Global Retail Businesses and
Services, Eric Stakland, noted: "The Sungwoo partnership offers
us a prime opportunity to expand our presence in Korea. With its
substantial resources and well established relationships, Sungwoo
also provides us with a regional platform on which to develop
a wide range of services to support the Asian market."
The agreement between Sungwoo and Telegroup covers both wholesale
(carrier) and retail traffic. Sungwoo will be terminating Telegroup's
wholesale and retail traffic in Korea; Telegroup will be terminating
Sungwoo's traffic worldwide. Additionally, Sungwoo and Telegroup
will be developing a co-branded retail program in Korea for domestic
and international termination and, in the near future, selling
co-branded value added services.
Sungwoo Information and Communication Co. Ltd is part of the Sungwoo
Group, based in Korea. The Sungwoo Group, which began with Hyundai
Cement, is part of the Hyundai Family business, which contributed
19.8% of the GDP production in Korea (1996 basis). By the 21st
century, it is expected that information and communication will
contribute more than 20% of the Korean national GDP. When the
Korean government deregulated the telecommunication market as
of January 1, 1998, Sungwoo I & C received a first grade license
and prefix number permitting them to do business in any communication
market, including switched, switchless, and internet resales.
Telegroup is a leading global carrier of long distance telecommunications
services to over 200 countries. Telegroup offers services to small-
and medium-sized businesses and residential customers. The company
also provides value-added wholesale services to over 40 domestic
and international telecommunications carriers. Telegroup is recognized
as having one of the most comprehensive global sales, marketing,
and customer service organizations of the emerging multinational
carriers. The company operates a digital, facilities-based network,
the Telegroup Intelligent Global Network®, which consists of a
central operating center, twenty-one switches, five enhanced service
platforms, owned or leased capacity on ten digital fiber-optic
cable links, and leased parallel data transmission capacity. 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 presence in Korea and
development of a wide range of service in the Asian market, improvement
of Telegroup's competitive position, 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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