EXHIBIT 99.1
AUSTAR TO ACQUIRE TARBS SPECTRUM
23 Oct 2000
Austar United Communications Limited and Television and Radio Broadcasting
Services Pty Limited today announced that they had agreed on the sale of TARBS's
2.3-2.4 GHz (MMDS) spectrum to Austar.
This spectrum will give Austar up to 98 MHz of bandwidth in each of Sydney,
Melbourne, Brisbane, Canberra, Adelaide and Perth, suitable for high speed,
broadband data, video, including interactive television, and ultimately voice
telephony using Voice over IP technology.
Under the sale terms, TARBS maintains its suite of A Band apparatus licences in
the 2.0-2.1 GHz range and also its transmitter sites and customer equipment.
In consideration for the MMDS spectrum, Austar has agreed to pay TARBS $140
million in cash and to also explore opportunities to distribute TARBS's pay
television content over networks in which Austar or its parent, UnitedGlobalCom,
Inc. (UGC), have an interest. Of the cash consideration, $110 million will be
paid on completion with the remaining amount plus interest to be paid on or
before 31 August 2001.
"For some time Austar has seen an opportunity in the capital city markets,
especially for high speed data services directed at the small to medium
enterprise, SOHO and high user residential markets," said John Porter, Chief
Executive of Austar United Communications.
"The acquisition of this spectrum gives us a low cost means of entering those
markets, using technology with which we are very familiar and in a manner which
complements our regional strategy."
Mike Boulos, Chairman of TARBS, noted that "Austar has chosen to acquire its
preferred spectrum, giving it a common platform in metropolitan and regional
Australia. This deal positions Austar with a very valuable, cost effective
transport stream which will allow it to deliver wireless broadband services
Australia-wide."
"The agreement to sell only the MMDS spectrum delivers to us the necessary
funding to allow TARBS to become the dominant and most comprehensive
multicultural network in Australia", said Regina Boulos, Chief Executive Officer
of TARBS. "Importantly, this deal also paves the way for closer co-operation
with Austar and its parent UGC for the distribution of selected TARBS pay
television content in New Zealand, Europe, South America and the United States".
Austar currently offers one way high speed internet access, together with chello
broadband, throughout regional Australia. In December, with its partners ADC
Inc. and Cisco Systems, Austar will begin a trial of two way high speed data
over the MMDS network. Two way data systems are already deployed on commercial
and trial bases in the USA and Europe.
"The MMDS spectrum gives us the capacity to do everything we plan to do in the
cities. It is available for use today. It will use the same equipment as we are
deploying in the regions and thus bring economies of scale," said Mr Porter.
"Another advantage is the fact that an MMDS network is scalable in line with
demand. Unlike a cable network there is no need to build out the network except
where there is a customer to service.
"As a result of this transaction Austar will withdraw from the current 3.4 GHz
spectrum auction. We anticipate acquiring a small amount of spectrum through the
auction process in Sydney and Melbourne. We believe that we will be able to use
that spectrum to complement our MMDS network," Mr Porter concluded.
The sale is subject to Foreign Investment Review Board approval.
TARBS was advised by the Corporate Finance Group of Macquarie Bank Limited.
Austar was advised by Salomon Smith Barney.
