STET and IBM announce preliminary agreement for global alliance.

NEW YORK--(BUSINESS WIRE)--August 3, 1995--STET, the Italian holding company which owns Telecom Italia, and IBM today announced a preliminary agreement to become global partners on a wide range of advanced business and consumer services via communication networks worldwide. A memorandum of understanding has been signed by the two companies and will be the basis for completing definitive agreements.

In broad terms, the preliminary agreement calls for the partners to:

o Combine the backbone networks of the two companies in a 50/50 global joint venture, which is expected to expand in the coming months with the addition of other telecom partners. The partnership will be the integration point for various data, voice, multimedia and industry solution capabilities, running on an open, multiprotocol platform architecture now in development.

o Jointly provide a robust suite of value-added telecom and network services (such as E-mail, groupware, Internet navigation, electronic data interchange, public information kiosks, videoconferencing and network outsourcing) to country partners worldwide, including Italy.

o Form a new venture for IT systems outsourcing and facilities management services in the Italian market.

o Collaborate on STET's introduction of interactive broadband services with plans to offer a full interactive multimedia system for homes and businesses.

"The agreement between STET and IBM is a significant event for three fundamental reasons," said Ernesto Pascale, chief executive officer of STET. "First, it represents a key step forward in the STET group strategy: an enhancement of its competitive edge as well as of its position in the international market place. The liberalisation of the telecommunications industry is an opportunity which cannot be missed and the agreement between STET and the world's largest information technology group may give both companies a significant competitive advantage on a global scale.

"Secondly," Pascale said, "such an advantage comes from the possibility of developing to the maximum extent the technological convergence between the respective sectors, i.e., telecommunications services and IT, in order to translate it into advanced services aimed at meeting the requirement of an increasingly sophisticated clientele. Finally, the agreement with IBM is aimed at enhancing the integration and synergies among the STET group companies which are expected to take advantage of the new activities which are being developed, such as global network, IT and interactive multimedia services."

"IBM's global partnership with one of the world's largest and most innovative telecom organizations will mutually reinforce our ability to deliver advanced network solutions," said Ned Lautenbach, IBM senior vice president and group executive. "We intend to offer a rich portfolio of services, featuring multimedia capabilities, not available globally from any other provider."

Summary Descriptions of the Partners

STET

The STET Group, with 1994 revenues of Lit. 33.8 trillion (U.S. $20.8 billion) and nearly 140,000 employees, includes over one hundred companies in Italy and abroad. STET's activities range from telecommunications services to manufacturing, network design and installation, publishing and information technology and market services, to multimedia ventures, research and training. On the international market, STET engages in operating telecommunication services by offering services and global solutions as well as supplying products and systems in manufacturing, engineering and installation sectors.

STET's core business is telecommunications services where it operates through Telecom Italia, the world's sixth largest wireline telecommunications carrier, with 1994 revenues exceeding Lit. 29 trillion -- a net profit of 1.45 trillion, and some 25 million subscribers.

Telecom Italia Mobile has been recently demerged from Telecom Italia and its shares have been listed on the Italian Stock Exchange. The company is Europe's largest mobile operator in terms of subscribers (3 million). Another highly important sector of the group's activities is information technology, where STET operates primarily through Finsiel, Europe's second largest IT software and services group. Finsiel's applications range from software technologies and computer services to regulation and standard oriented research and development initiatives in Italy and Europe, to research on distribution security systems and testing of EDI systems.

STET is entering the new multimedia services arena and is testing video-on-demand services in Rome and Milan.

IBM

IBM develops, manufactures and sells advanced information processing solutions, including computer hardware and software, networking systems and a wide assortment of global information technology-related services. Operating in 159 countries with 219,000 employees in 1994, IBM had revenues in 1994 of $64.1 billion.

The IBM Global Network has one of the world's largest integrated data, voice and video networks. Drawing on a history of managing customers' data resources, it supports thousands of LANs and host-based networks via landline and wireless connections for 25,000 customer accounts in more than 850 cities and 100 countries. The IBM Global Network provides high-speed Internet access to more than 200 cities in 26 countries, and will offer access in 450 locations in nearly 40 countries by the end of the year.

CONTACT: IBM

Brian Ditzler,

212/789-7705, after August 3: 914/684-4002/4223

or

Sergio Veneziani, 011/39-2-5962-4862

or

STET

Isabella Tosato, 011/39-6-8589-421