AT&T and Unisource announce new communications company for Europe.

BASKING RIDGE, N.J.--(BUSINESS WIRE)--Dec. 13, 1994--AT&T and Unisource today announced a new company that will combine their data and business voice services in Europe. With a primary focus on providing communications services to multinational companies operating in Europe, the new company will offer customers improved access to North America and the Asia/Pacific region.

Subject to regulatory approval by the European Union Authorities, the joint venture is expected to be fully operational by mid-1995. Some services are already available now as the result of the companies' earlier cooperation on closed user-group voice services, and in the WorldPartners Association.

"AT&T is committed to serving its customers' needs anywhere around the world that they do business, and this joint venture is just one more example of that," said Victor A. Pelson, AT&T executive vice president and chairman of its Global Operations Team. "We look forward to the day when we can offer our customers an even greater range of services through a more liberalized regulatory framework in Europe.

"Meanwhile other proposed alliances, such as that of Sprint with France Telecom and Deutsche Telekom, would actually strengthen the monopolies in France and Germany, and deny their customers the benefits of choice, new technologies, flexible pricing and innovative services," Pelson said. "More importantly, that alliance would result in a 20 percent share of Sprint being sold to FT and DBT, giving these monopolies access to the United States market, the most open telecommunications market in the world, while France and Germany would remain effectively closed to AT&T and other carriers."

Under the terms of an agreement in principle, Unisource will own 60 percent of the venture and AT&T will own 40 percent. The new company will have assets of approximately $200 million, and more than 2,000 employees, at the outset. It will have more than 300 of the world's leading multinational companies as customers.

"This joint venture will help fuel competition in Europe, which ultimately benefits customers," said Lars Berg, chairman of the Unisource Board. "European customers are no longer satisfied with separate data and voice services of differing standards, and they shouldn't be. They deserve a combined offering of both. Our new company will provide these services with uniform high quality and one-stop ordering, billing and provisioning. It also will offer end-to-end service guarantees for customers."

Unisource will merge its business networks, satellite and voice services divisions with the AT&T Business Communications Services Europe and AT&T EasyLink(R) Services groups in creating the venture. Employees in 17 countries will join the new company, including a significant number of employees from Spain's Telefonica, which is in the process of joining Unisource as a fourth and equal shareholder.

"The creation of this joint venture in Europe stems from a common vision, and we are committing significant resources and people to make this venture a reality," said Pier Carlo Falotti, president, AT&T Europe/Middle East/Africa. "Today we are putting in place the future of our European services business. Our new company's broad service offerings will not only benefit global companies, but also the larger segment of European business users that includes small- and medium-sized companies.

"We believe that Europe must become a substantially more competitive environment in order to serve today's sophisticated customers," Falotti said. "Our new joint venture will support continuing liberalization and will deliver substantial benefits to customers."

Unisource and AT&T have been working closely in Europe since April 1994 when a joint bid by the two companies was selected for provisioning of voice services to the European Virtual Private Network Users Association (EVUA), a group consisting of approximately 30 of Europe's leading multinational companies.

Their relationship was further strengthened when Unisource joined the WorldPartners alliance of global telecommunications carriers in June. WorldPartners offers seamless voice and data services -- including private line, frame relay and virtual network services -- that provide global connectivity to multinational companies in the world's major markets. WorldPartners was formed 18 months ago by AT&T, KDD of Japan and Singapore Telecom. The new company will become both an equity partner in the WorldPartners company, as well as the WorldPartners Association member for WorldSource(SM) services in Europe.

"We were extremely pleased when AT&T and Unisource got together to provide services to the EVUA members," said Malcolm Woollaston, global telecommunications manager-voice and Video, for 3M. "The strengthening of their relationship in this new venture is a very positive step. It shows their commitment to the marketplace and can only be good for customers like 3M."

AT&T and Unisource announced the appointment of Viesturs Vucins, currently Unisource president, as chief executive officer of the new company. John Foster, currently president and managing director of AT&T Communications Services Europe, will be chief operating officer of the new venture. The headquarters, location and company name are expected to be announced early in 1995.

"This is the most important step for customers in Europe that has been taken by any alliance," Vucins said. "We are fully committed to being the best company to do business with, and we are already up and running. This dynamic teaming of AT&T and Unisource is destined to increase our pace in bringing the most advanced services to our customers."

Unisource

Unisource is the first truly pan-European telecommunications service provider. Founded in 1992, Unisource is a joint venture of PTT Telecom Netherlands, Sweden's Telia and Swiss Telecom PTT. In July, it was announced that Spain's Telefonica will join as an equal shareholder. Unisource has sales offices in all major European markets, and offers an extensive portfolio of telecommunications solutions to international companies. Unisource has a cooperative alliance with SITA, operator of the world's largest private network, and Japan's KDD.

AT&T

AT&T is the world's networking leader, providing communications services and products, as well as network equipment and computer systems, to businesses, consumers, telecommunication services providers, and government agencies. In Europe, AT&T employs more than 26,000 people in 17 countries.

WorldPartners

Formed in May 1993, WorldPartners is an association of member companies who have joined to provide a family of WorldSource services (private line, frame relay and virtual network services) to multinational customers. Member companies are AT&T, KDD of Japan, Singapore Telecom, Telecom New Zealand International, Telstra of Australia, Unisource, Hong Kong Telecom, Unitel of Canada and Korea Telecom. The new venture will replace Unisource as the European member and one of the equity shareholders.

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AN URGENT NEED FOR UNIVERSAL COMPETITION

Although the benefits of infrastructure competition in basic services are praised globally, a vast majority of European communications customers are still a long way away from experiencing increased quality, new technologies, flexible pricing, innovative services and all the choices that competition brings. AT&T is entering these limited markets. However, the cost of delaying liberalization may be substantial. Exclusive partnerships between monopolies such as France Telecom and Deutsche Berndespost and Sprint, if approved, condone monopoly arrangements and disregard the lessons learned from full and open competition. The significant differences between AT&T's alliance with Unisource and Sprint's alliance with FT and DBPT, are noted below:

ISSUE            AT&T AND UNISOURCE                SPRINT/FT/DBPT
General     The AT&T and Unisource alliance  The Sprint/DBPT/FT alliance
            will give business customers     will not provide customers
            within closed-user groups in     with a new choice.  France
            Europe, a new choice of voice    Telecom and Deutsche Bundes-
            and data carrier for their       post are both monopolies
            European and global seamless     whose customers will
            service needs. These are the     continue to depend on their
            only category of customers in    monopoly services.  Mean-
            Europe who currently can enjoy   while, through their
            the benefits of voice and data   investment in Sprint, these
            competition.                     monopoly carriers will gain
                                             access to the highly
                                             lucrative U.S. market.
Ownership   Neither AT&T nor Unisource is    FT and DBPT will obtain 20%
            gaining an ownership interest    ownership in Sprint thereby
            in the other or in any tele-     gaining access to the U.S.
            phone monopoly.                  and all the international
                                             traffic between Sprint and
                                             the world.

Scope of Services

 offered    Value-added, enhanced voice and  Partners can offer both
            data services.                   enhanced and public
                                             switched basic services
                                             to all.
Customers   European business customers      All business and residence
            belonging to closed-users        customers - without
            groups.                          restriction, using both
                                             switched and private
                                             networks.
Facilities  Cannot own facilities.  Will     All three carriers own
            lease access from the monopoly   their facilities.
            telecom carriers in Europe.

Incentive to dis-

 criminate  None. The AT&T and Unisource     FT and DBPT, because of
            alliance has no market power to  their financial interest in
            discriminate against or exclude  Sprint, have an incentive
            other competitors. The existing  to leverage their control
            international service agreements over access to French and
            that AT&T and the members of     German customers, to the
            Unisource have with carriers     detriment of all U.S.
            worldwide are unaffected and     carriers except Sprint.
            are independent of the new
            service offering.
            AT&T COMMUNICATIONS SERVICES GLOBALIZES

The AT&T and Unisource alliance is another step in AT&T's efforts to provide multinational corporations seamless, global business voice and data services. AT&T's integrated business service offerings, through the WorldPartners alliance span Europe, the North American continent and several Asian countries.

AT&T has also expanded into offering basic services in countries that have liberalized and opened to competition. Earlier this year, AT&T announced its partnership with Alfa, to offer telecommunications services to business and residential customers throughout Mexico. In partnership with Unitel, AT&T is already a carrier of choice for customers in Canada. And in the U.K., AT&T is awaiting a final license to provide basic services. As markets liberalize, AT&T will explore further opportunities to globalize its services.

AT&T also serves residential consumer markets through its USADirect(R) Service In-Language---completing calls in the local language for residents in over 14 countries. WorldPlus(sm) Communications Service, announced earlier this year, is a new offer designed to meet the telecommunications needs of frequent international travelers. It can be accessed from more than 45 countries and areas worldwide.

AT&T's COMMUNICATIONS SERVICES GLOBAL PRESENCE

I. WORLDPARTNERS

        U.S. - AT&T
        Canada -Unitel
        Japan - KDD
        Singapore Telecom
        Telecom New Zealand International
        Australia - Telstra
        Hong Kong Telecom
        Korea
        U.K. - AT&T
        Unisource which covers Austria, Belgium, Denmark, Finland,
        France, Germany, Greece, Ireland, Italy, Spain, Luxembourg,
        Netherlands, Norway, Portugal, Sweden and Switzerland

II. BASIC SERVICES:

        Canada--Unitel Communications Inc.
        Venezuela--CANTV
        Jamaica ---Jamaica Digiport telecom services to and from Free
        Trade Zones
        Ukraine---UTEL
        AT&T has also announced plans for basic service offerings in:
        Russia---Telmos
        Mexico--Alfa
        United Kingdom

III. AT&T USADirect (R) Service In-Language

        China
        Colombia
        the Dominican Republic
        Egypt
        Gabon
        Haiti
        India
        Ivory Coast
        Nicaragua
        Philippines
        Poland
        Russia
        Syria
        Venezuela

A map of the global reach of the WorldPartners Association is available from the Wieck database. Call 214/392-0888.

CONTACT: AT&T

             Mike Granieri
             908/221-7611 (office)
             201/503-0894 (home)
             Marge D'Amico
             908/658-6895 (office)
             609/921-3424 (home)
              or
             Unisource
             Diane Makovsky
             [phone] (office)
             [phone] (mobile)