Bell Canada International Agrees to Invest US$159 Million to Acquire 23.6 per cent of Hansol PCS - Deal is First Major Foreign Investment in Korean Telecom Market.

MONTREAL--(BUSINESS WIRE)--Aug. 18, 1998--BCI (NASDAQ:BCICF) (ME:BI.) (TSE:BI.) (NASDAQ:BCICF) Bell Canada International Inc. (BCI) has agreed to acquire approximately 23.6 per cent of Hansol PCS Co. Ltd. (Hansol) for 210 billion Won (US$159 million). Hansol was one of three Korean companies to receive a PCS licence in 1996, and launched its nation-wide PCS service in October 1997. To date, the company has acquired more than 900,000 subscribers. As part of the agreement, funds sponsored by the American International Group Inc. (AIG), including the AIG Asian Infrastructure Fund and the AIG Asian Infrastructure Fund II, will also invest 140 billion Won (US$106 million) to acquire approximately 15.8 per cent of Hansol. AIG has partnered with BCI on a number of other ventures, including Yantai Bell and Shandong Bell in China, and Tata Communications in India.

The closing of the investment is subject to various conditions, including the approval of Hansol shareholders and regulatory approval; Hansol hopes to receive shareholder approval at a meeting to be held at the beginning of September.

Under the terms of the agreement, BCI will acquire initially 9.75 per cent of Hansol in the form of common shares. BCI will increase its stake to 18.2 per cent through the acquisition of convertible preferred shares in October 1998, and in January 1999 BCI will acquire the remainder of its interest in the form of convertible bonds. The cost for BCI's stake in Hansol has been adjusted downwards to reflect changes in market conditions since the original Memorandum of Understanding was announced in April.

BCI will play an active role in the financial and technical operations of Hansol, and will place several key executives in the company, including the Deputy Chief Executive Officer and Chief Financial Officer.

"Our investment in Hansol is a key component of our diversification strategy - almost doubling the size of BCI in terms of subscribers - and presents a tremendous opportunity to increase the value of our company," said Derek Burney, BCI chairman and CEO. "We believe that the Korean economy remains fundamentally strong, the wireless market holds great potential, and Hansol has proven itself a successful marketer. Furthermore, the terms of our investment are attractive, and will allow us to play a major role in building the company and create value for our shareholders." Hansol President Chung Yong-moon said, "We welcome very strongly the participation of BCI and AIG in Hansol. Their investment of capital, people and expertise will strengthen the competitiveness of the company, revitalizing our financial strength, allowing us to enhance our network and the quality of our services, and improving our overall operations. With BCI as its strategic partner, Hansol PCS intends to lay the groundwork to become a world-class telecommunications company."

Mr. Bae, Minister of Information and Communication, also commented on the agreement, "Our government welcomes BCI and AIG's investment in Hansol PCS, and believes it will make Hansol PCS a strong player in Korea's wireless communications sector. This investment also is the first major foreign investment in Korea's telecommunications industry, and we hope it will encourage future foreign investments in Korea. This kind of investment, we believe, not only helps the companies involved, but also enhances the overall quality and competitiveness of the Korean telecommunications industry."

His Excellency Hang Kyung Kim, Korean Ambassador to Canada said, "I am very pleased to see a prominent Canadian company like BCI make this kind of investment in Korea's economy. I believe this agreement will help foster even stronger relations between our two countries, and hope it leads the way for other Canadian companies to seek partnerships in Korea."

BCI is a leading provider of telecommunications services in markets outside of Canada. The corporation owns, develops and operates telecommunications systems with a focus on the wireless sector. BCI is a subsidiary of BCE Inc., Canada's largest telecommunications company, and trades on the Montreal and Toronto Exchanges under the symbol "BI", and on the NASDAQ under the symbol "BCICF".

AIG is the leading U.S.-based international insurance organization and among the largest underwriters of commercial and industrial insurance in the United States. It operates in approximately 130 countries and is engaged in a range of financial services businesses. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

Hansol PCS Co. Ltd. is a consortium led by the Hansol Paper Group, and has a number of other Korean investors, including Dacom, Hanwha Group, Ssangyong Group, Gohap Group, Youngpoong and Jindo.

    CONTACT:  Bell Canada International Inc.
               William Gajda, 514/392-2466
               [e-mail]
               or
               Bell Canada International Inc.
               Anne Duprat, 514/392-2273
               [e-mail]