Dolphin Telecom Announces 2001 Development Plans, TIW Confirms Financial Support

Business Wire, Dec 20, 2000

Business Editors

BASINGTOKE, U.K. and Montreal--(BUSINESS WIRE)--Dec. 20, 2000

TIW (NASDAQ:TIWI) (TSE:TIW.)

All amounts are in US$, unless otherwise stated

Dolphin Telecom plc (Dolphin), a subsidiary of Telesystem International Wireless (TIW), announced today its development plans and funding requirements for 2001.

With an anticipated 50,000 digital subscribers at year end 2000 and a national digital network of approximately 950 sites, the United Kingdom (U.K.) will continue to be a primary focus for Dolphin in 2001. The Company expects to invest approximately $300 million in the U.K. (including capital expenditures, operating losses and working capital) during 2001. The improved subscriber growth in the last quarter of 2000 with approximately 20,000 net additions, deeper coverage and increased customer satisfaction will represent a strong platform from which Dolphin intends to grow its digital customer base to 150,000 subscribers in the U.K. at year end 2001.

Growth in 2001 will be achieved through enhanced network coverage in major cities, the anticipated introduction of a second generation of handsets in the second quarter, focused sales efforts towards specific industry segments, as well as continued enhancements to Dolphin's sales channel strategy. Network development will include the addition of over 650 sites to reach a total of more than 1,600 acquired and built sites, of which 1,500 will be integrated within the U.K. network at year-end 2001.

Commenting on Dolphin's U.K. plans for 2001, Steven Evans, Chief Executive Officer, said "As we move into 2001, we are ideally placed to capitalise on the encouraging subscriber growth achieved in the United Kingdom over the past three months. Through continued investment in our network and the introduction of a new generation of handsets, we look forward to accelerating our growth and establishing ourselves as a major player in the business market. I am confident that in 2001 we will meet the targets we have outlined today."

As previously announced, Dolphin intends to scale its investments in its other European markets. Following the recent launch in two regions in France, investments will be focused on launching digital service in two additional regions of the country in the first half of 2001. In Germany and Belgium, investments will be scaled towards launches in the second half of the year.

Following the launch of digital services in two regions (Nord/Pas-de-Calais and Rhone-Alpes) in France this quarter, Dolphin intends to continue its regional deployment in 2001. Service will be offered in two additional regions in France in the first half of 2001: Provence/Cote d'Azur and Ile-de-France (Paris). By the end of 2001, Dolphin intends to extend service to four more regions, thereby serving the eight key economic regions of the country, covering over 5,000 cities. The French network in these eight regions would reach approximately 800 sites by the end of 2001.

Dolphin intends to launch digital services in Germany in the second half of 2001. At launch, services would be available in the four main economic regions of Berlin, Frankfurt, Hamburg and Rhein-Ruhr. Quality coverage in these areas would be offered with more than 200 sites at launch date. Following this initial regional coverage, Dolphin would expand its network with the objective of achieving a national service in 2002.

During 2001, Dolphin intends to develop its Belgian network for a national launch in the second half of 2001, with approximately 130 sites at launch, providing coverage to 85% of the population.

As stated above, requirements (including capital expenditures, operating losses and working capital and taking into account available cash and credit facilities) for the U.K. in 2001 will total $300 million. Requirements for the first half of the year for the U.K. and the other markets should total $300 million. Requirements for the second half are going to be a function of several factors, including the timely availability of a second generation of handsets from Nokia and Motorola, the availability and optimization of infrastructure for Germany and Belgium, and the availability of additional debt and equity financing, especially in regard to plans in development-stage markets. If Dolphin's expectations in this regard are fulfilled, total requirements for the second half of 2001 would total $300 to $400 million.

TIW has stated it plans to provide financial assistance of up to $300 million in the form of convertible loans to Dolphin Corporation Limited to support Dolphin's growth. This financial assistance follows an investment by TIW of $165 million, also in the form of convertible loans to Dolphin Corporation Limited in the current quarter. Dolphin Corporation Limited is a direct wholly-owned subsidiary of Dolphin Telecom plc. and owns, directly or indirectly, all the shares of Dolphin Telecommunications Limited (U.K.) and Dolphin Telecom S.A. (France) and 93.2% of the shares of Dolphin Telecom (Deutschland) GmbH. These loans are exchangeable for shares of Dolphin Telecom plc at any time at the option of TIW.