Alcatel and Convergence Communications Inc. Announce Plan to Build Next Generation IP Networks in Latin America - Company Business and Marketing

Cambridge Telcom Report, March 20, 2000

Alcatel (NYSE: ALA) and Convergence Communications Inc., (CCI) Thursday announced a technology partnership to provide turnkey state-of-the-art broadband IP networks in Latin America. Both parties value the relationship at $175 million.

Alcatel will arrange vendor financing for CCI as part of the agreement, which is expected to operate for a minimum of three years. This project represents Alcatel's first next-generation IP network to be deployed in Latin America on a pan-regional basis.

"This is a significant relationship for CCI and will allow us to dramatically increase both our presence in these markets as well as our range of broadband product offerings to customers," said Lance D'Ambrosio, Chairman and CEO, Convergence Communications Inc. "The alliance with Alcatel provides our clients with an integrated, high-quality IP solution and provides a solid foundation for our continued expansion in the region."

"Our ability to offer advanced, turnkey networks results from a comprehensive portfolio and a partnership approach to our customers," stated Krish Prabhu, Chief Operating Officer for Alcatel Telecom. "We have extensive broadband and IP expertise within the company, which was only strengthened by our recent data acquisitions. The product solutions from Xylan, Assured Access, Packet Engines and Internet Devices are key components of our solution to Convergence Communications."

The CCI networks will be "pure" IP networks, optimized for both data and voice applications. The network utilizes broadband wireless access, fiber optic access, broadband remote access servers and a gigabit Ethernet core network. The network will support current and future "bandwidth hungry" service applications and provides IP Virtual Private Networks with superior bandwidth management, quality of service and security levels.

"We selected Alcatel because of a shared vision for the deployment of IP telephony services in Latin America," said Mr. D'Ambrosio. "They've demonstrated a thorough knowledge of and commitment to the region and place a strong emphasis on providing us with a turnkey solution encompassing detailed network design, training, construction and project management."

The CCI and Alcatel teams will expand networks in 17 cities across Mexico, Guatemala, El Salvador, Costa Rica, Panama and Venezuela, substantially increasing CCI's existing footprint in Latin America.

The integrated networks will provide a wide range of applications including; e-commerce, web hosting, high-speed internet access and value-added telephony applications such as integrated voice messaging and fax services, "follow-me" global numbers, pager and web notification and the provisioning of US 800 numbers through computer telephony integration (CTI) and "real" telephony.

Alcatel builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion ($22.5 billion), Alcatel operates in more than 130 countries. For more information, visit Alcatel on Internet: http://www.alcatel.com

With over 40 years of experience in the Latin American telecommunications market, Alcatel offers equipment and services to operators for new services, expansion of traditional services, and expanded bandwidth for data transmission and high-speed internet access.

Convergence Communications, Inc., founded in 1995, and based in Salt Lake City, UT, is a Latin American facilities-based, telecommunications company which owns and operates IP-based, broadband metropolitan area networks. The Company offers a "one-stop" menu of broadband connectivity, IP-telephony, high-speed Internet access, web-site hosting, virtual private networks and e-commerce services to businesses and consumers in Latin America. The Company has over 10,000 kilometers of fiber optic cable and provides first-mile broadband connections through a variety of delivery technologies including fiber optic cable, hybrid fiber coaxial cable and broadband fixed wireless connections. The Company serves over 33,000 customers and currently has operations in nine countries - Mexico, Guatemala, El Salvador, Costa Rica, Panama, Honduras, Nicaragua, Venezuela and the Dominican Republic.