AUSTRALIAN GOVERNMENT AWARDS MAJOR TELECOMMUNICATIONS LICENSE
TO BELLSOUTH CONSORTIUM
ATLANTA, Nov. 19 /PRNewswire/ -- BellSouth Enterprises announced today that Optus Communications, in which it holds 24.5 percent equity, has won the tender to purchase AUSSAT, a satellite communications concern, and become the second telecommunications carrier in Australia.
Finalization of the purchase is due to occur on or before Dec. 31, following ratification of the second carrier license conditions by Australia's Federal Parliament.
The other equity holders in Optus Communications are Cable & Wireless plc, of the U.K. (24.5 percent), with the remaining 51 percent held by leading Australian companies and institutions -- Mayne Nickless, the AMP Society, National Mutual, as well as the AIDC Ltd. Telecommunications Fund.
As the second carrier, Optus will be able to compete fully with AOTC, the merged entity of the current monopoly carriers, Telecom Australia and OTC (AOTC). Optus will be allowed to offer a full range of network services, including domestic and international long distance services, mobile, personal communications services and all forms of private line and business network services.
"Optus' plans for Australia will result in the most advanced integrated telecommunications network in the world," said Charles B. Coe, president of BellSouth International. "We have the opportunity, by building this new carrier from the ground up, to create a world-class telecommunications company."
The Australian government has created a competitive environment and a regulatory framework that is unprecedented. Access to Optus, by dialing only one additional digit, will begin on day one and interconnection will initially be provided at direct costs, enabling Optus to forecast long distance price reductions of 40 percent in real terms over the next five years.
Optus plans to rapidly deploy a fiber optic backbone network extending around Australia, which will be complemented by highly advanced digital switching and transmission systems. Over the next five years, Optus will invest about US$3.1 billion (A$4B), approximately one half of which will be generated by the business itself. This investment will be used to build and operate a nationwide network, representing one of the largest capital development projects in Australia's history.
BellSouth expects to invest up to $300 million over the next four years. Earnings are expected to be negatively affected by 4 cents per share in 1992 and 7 cents per share in 1993.
"Strategically, we see Optus as the vehicle that will help BellSouth demonstrate to the world that our basic technology, our network design and engineering skills, our focus on customers, their needs and their satisfaction are the keys to telecommunications service in the 21st century," Coe continued. "We see outstanding growth opportunities for BellSouth and Optus, given the relative political stability of Australia and its proximity to other Asia-Pacific markets -- many of which are looking to modernize their telecommunications infrastructures."
The Australian market continues to experience strong demand for international and other advanced network services. The Australian cellular market, for example, already has one of the highest growth rates in the world, with penetration of 2 percent of the population since beginning in late 1987. Optus will roll out the first component of its mobile services in the second quarter of 1992 by reselling capacity on the existing monopoly AMPS cellular network. By early 1993, Optus plans to commence marketing its own GSM digital cellular network services and plans to extend this network to provide coverage for 80 percent of Australia's population by 1997. Optus' cellular service will be fully compatible with BellSouth New Zealand's digital cellular service, which is due to commence operations in late 1992.
In addition, Optus will provide its first switched domestic and international long distance services late in 1992 -- anticipated to extend to virtually 100 percent of the population by 1997. To allow Optus to compete more fully with AOTC in the international telecommunications market, BellSouth applied for and has been granted a waiver from the "Inter-LATA" restriction imposed by the Modification of Final Judgment.
BellSouth (NYSE: BLS) is an Atlanta-based international telecommunications holding company. Its subsidiaries offer local telephone service in the southeastern U.S., mobile communications and other network services worldwide, provide advertising and publishing services, and market and maintain stand-alone and fully integrated communications systems.
/CONTACT: Pat Hammerstrom, 404-249-4865, or Tim Klein, 404-249-4135, both of BellSouth Enterprises/
(BLS) CO: BellSouth Enterprises; BellSouth Corporation; Optus Communications ST: Georgia IN: TLS SU: BN-BR -- AT003 -- 4789 11/19/91 09:00 EST