PictureTel Raises Latin American Profile Through Strategic Alliance With Telefonica CTC Chile - Company Business and Marketing

Cambridge Telcom Report, April 3, 2000

Adding to PictureTel's existing partnerships with leading network providers around the world, PictureTel Corporation (Nasdaq: PCTL) Tuesday announced a strategically important, five-year videoconferencing service alliance agreement with the Chilean national telecommunications giant, Telefonica CTC Chile S.A. The alliance extends the reach of Telefonica CTC beyond Chile and solidifies PictureTel's Latin American operational base.

Under the terms of the agreement, PictureTel and Telefonica CTC will immediately launch a multipoint conference service center in Santiago, Chile, delivering voice, video and data conferencing service applications over ISDN networks in Latin America. In addition, Telefonica CTC will provide videoconferencing equipment to its customers. In the course of working with Telefonica CTC, PictureTel will lay the groundwork for a technology platform that will enable Telefonica CTC to deliver rich media application services over the Internet, including video streaming and Web-based video application services.

Being the only videoconference bridging service provider currently operating in Chile, Telefonica CTC and PictureTel aim to grow the existing videoconferencing services and product endpoint market significantly by the year 2002, with a goal of a tenfold increase.

"This venture into Latin America allows companies in Chile and elsewhere in the region to dramatically enhance their business processes and effectiveness," said Dr. Norman Gaut, PictureTel chairman, CEO and president, in a videoconference connection with the announcement ceremonies in Santiago, Chile. "The alliance with Telefonica CTC provides PictureTel with significant growth opportunities, as part of our campaign to partner with leading network providers to globally expand our rich media application services network," added Gaut.

"Our goal is to double Latin American service revenues within two years," Gaut noted. The alliance will also permit companies to videoconference with anyone in the world, adding Latin America to PictureTel's worldwide "backbone" system of conference service centers in Andover, Mass.; Slough, England; Tokyo; Singapore; and Mexico City, Mexico.

"Our business relationship with PictureTel will enable Chile's business, government and educational communities to conduct business effectively over video using these powerful solutions," said Roberto Cholaky, director of videoconferencing applications for Telefonica CTC Globus S.A. "PictureTel's commitment to providing ISDN and IP-based collaborative conferencing, streaming and broadcasting will empower customers to boost productivity, enhance effectiveness and streamline business processes."

The agreement calls for PictureTel and Telefonica to share gross revenues for selected bridging services. In addition, PictureTel will provide technical expertise, processes, software tools, training and marketing support to Telefonica CTC.

PictureTel Corporation (Nasdaq: PCTL) is the world leader in developing, manufacturing and marketing a full range of visual- and audio-collaboration and streaming-video solutions. The company's systems meet customers' collaboration needs from the desktop to the boardroom. PictureTel also markets network conferencing servers and a comprehensive portfolio of enterprise-wide services. Additional PictureTel information is available at www.picturetel.com. PictureTel collaboration products and services eliminate the barrier of distance, enabling people to be Anywhere Now.

Companias de Telefonos Edison first went into telephone service in 1880. Compania de Telecomunicaciones de Chile traces its roots to that early enterprise and the companies that succeeded it. CTC was officially formed as a private company on November 18, 1930. In 1971, the company was intervened by the Chilean government. In 1974, Series A shares of CTC were acquired by the State. In 1987, a privatization process began to return the Company's ownership to private hands.

Since 1990, CTC's principal shareholder has been Telefonica de Espana S.A., through Telefonica Internacional Chile S.A. In 1990, CTC's shares began trading on the New York Stock Exchange. Telefonica CTC has been quick to respond to rapid changes in the telecommunications market and has introduced new businesses such as mobile communications, long distance service, cable television, telecommunications equipment marketing and other ventures that enhance the use of its network. In 1995, CTC's bylaws were amended to expand the company's mission and the name was also changed to reflect this wider purpose. CTC is now officially "Compania de Telecomunicaciones de Chile S.A."