Telegroup gains $20 million to expand global telecom network.

FAIRFIELD, Iowa--(BUSINESS WIRE)--Dec. 10, 1996--Telegroup officials announced this week that Telegroup received $20 million from Greenwich Street Capital Partners Inc., a New York-based private equity fund. Proceeds will finance development of Telegroup's unique international communications network.

"This is a great milestone," said Fred Gratzon, chairman of Telegroup, an Iowa-based telecommunications provider ranked one of America's fastest-growing private companies by Inc. magazine. "We just stepped on the gas and pulled away from the crowd. If you think you've seen fast growth up to now, just wait."

The private placement was arranged by the investment banking firm of Smith Barney, Inc., New York.

Telegroup is a uniquely positioned international telecommunications company. A recent preliminary study by the FCC rated Telegroup the 6th largest U.S. provider of international telecommunications services. The global market for telecommunications services is large and rapidly growing. Approximately $50 billion is spent worldwide on international calls.

Telegroup has developed the Telegroup Intelligent Global Network (TIGN) to take advantage of this substantial market opportunity. The network features an integrated switch architecture unique to the industry, having replaced traditional hardware components with advanced software engineered by a team of programmers at Telegroup Labs.

The project will broaden Telegroup's domestic and international distribution network and develop related support systems, according to Telegroup President Cliff Rees. Telegroup's TIGN is designed to provide the most cost-effective means of sending and receiving voice and data internationally.

CONTACT: Doug Neish, Financial Relations

Telegroup, Inc.

[phone], ext. 2320