<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) May 16, 1999
____________
U S WEST, Inc.
(Formerly "USW-C, Inc.")
________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Delaware 1-14087 84-0953188
____________________________ ___________ ___________________
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1801 California Street, Denver, Colorado 80202
________________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 672-2700
______________
USW-C, Inc.
________________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
================================================================================
Item 5. Other Events.
On May 17, 1999, U S WEST, Inc., a Delaware corporation ("U S WEST") and
Global Crossing Ltd., a Bermuda company ("Global Crossing"), announced a
definitive agreement to merge. A copy of the Global Crossing and U S WEST press
release, dated May 17, 1999, and the Global Crossing and U S WEST joint analyst
presentation, dated May 17, 1999 (the "Analyst Presentation"), are attached
hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by
reference.
Statements made in the Analyst Presentation that state the intentions,
beliefs, expectations or predictions of Global Crossing, U S WEST or their
respective managements for the future are forward-looking statements. It is
important to note that both Global Crossing's and U S WEST's actual results
could differ materially from those projected in such forward-looking statements.
Information concerning factors that could cause actual results to differ
materially from those in the forward-looking statements is contained from time
to time in the filings of each of Global Crossing and U S WEST with the U.S.
Securities and Exchange Commission (the "SEC"). Copies of these filings may be
obtained by contacting Global Crossing or U S WEST, as applicable, or the SEC.
Item 7. Exhibits.
The following exhibits are filed as part of this Current Report on
Form 8-K:
Exhibit Number Exhibit
- ---------------- -------
99.1 Joint Press Release of Global Crossing Ltd., and U S
WEST, Inc., dated May 17, 1999
99.2 Joint Analyst Presentation of Global Crossing Ltd. and
U S WEST, Inc., dated May 17, 1999
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U S WEST, Inc.
(Formerly "USW-C, Inc.")
(Registrant)
/s/ Thomas O. McGimpsey
____________________________
Thomas O. McGimpsey
Assistant Secretary
Date: May 18, 1999
3
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4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Joint Press Release of Global Crossing Ltd. and U S
WEST, Inc., dated May 17, 1999
99.2 Joint Analyst Presentation of Global Crossing Ltd. and
U S WEST, Inc., dated May 17, 1999
<PAGE>
EXHIBIT 99.1
GLOBAL CROSSING AND U S WEST TO MERGE
Leaders In DSL, Next-Generation Network Create First Global & Local Service
Provider
- - Will deliver seamless end-to-end connectivity for local, national and
international customers - Two separate tracking stocks will provide choice for
income and growth investors - $75 billion company with 115,000 route miles will
connect 185 cities worldwide
HAMILTON, BERMUDA and DENVER, CO, May 17, 1999 - Global Crossing Ltd. (NASDAQ:
GBLX) and U S WEST, Inc. (NYSE: USW) today announced a definitive agreement for
an industry-transforming merger that will create a seamless end-to-end local-to-
global broadband network, provide integrated telecommunications and data
services, and accelerate the deployment of high speed Internet services to
local, national and global markets.
The new company, which will be called Global Crossing Corporation, will be the
first Global and Local Service Provider in an era when traditional RBOCs and
long distance carriers are becoming obsolete. Including Frontier Corporation
(NYSE: FRO), a leading provider of integrated telecommunications and Internet
services which is being acquired by Global Crossing, the combination has a
current pro forma market capitalization of more than $75 billion. The new
company will be 50% owned by Global Crossing/Frontier shareholders and 50% owned
by U S WEST shareholders.
The three companies had combined 1998 sales in excess of $15 billion; earnings
before interest, taxes, depreciation and amortization (EBITDA) of over $6.2
billion, and over 63,000 employees. They will have over 115,000 combined route
miles, more than 2.8 million fiber miles and a network linking 19 countries and
185 cities.
Solomon D. Trujillo, Chairman, President and CEO of U S WEST, said, "This merger
brings together the first mile, the last mile and everything in between. It
opens up a new world of advanced communications services to local customers
across the globe. It combines all the elements necessary for building the data-
centric telecommunications network of the future for both residential and
commercial customers."
Robert Annunziata, Chief Executive Officer of Global Crossing, said, "This
transaction will give local users in the U.S. and around the world seamless
access to a full array of advanced data, voice and Internet capabilities and
services across a cutting-edge global network. The combination will create an
aggressive, high-bandwidth communications carrier which will target telecom
markets worldwide. U S WEST's advanced technology and more than 25 million
customers in the fastest growing region of the U.S. make it an ideal partner as
we continue to expand our global infrastructure."
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2
The new company will establish two separate tracking stocks to give investors a
choice of high-growth and income-oriented investment options. Global Crossing
"Class G" (Global Service Provider) shares will track the high-growth global
data and voice network and Internet assets and are not expected to pay a cash
dividend. Global Crossing "Class L" (Local Service Provider) shares will track
the performance of the combined companies' existing local telecommunications
assets and are expected to pay an attractive cash dividend.
In the transaction, each U S WEST share will be exchanged for approximately 1.2
shares of Class G or Class L Global Crossing stock, and each Global Crossing
share will be exchanged for one share of either of the two Global Crossing
tracking stocks. At their option, each U S WEST and Global Crossing shareholder
may elect to receive differing percentages of the two tracking stocks, subject
to proration. The exact number of Class G and Class L Global Crossing shares to
be issued in the transaction will be in proportion to the relative valuations of
the Class G and Class L shares, as determined through an appraisal process
shortly before the transaction is completed.
As part of the transaction, U S WEST will make a cash tender offer for
approximately 39 million Global Crossing shares (or approximately 9.5% of Global
Crossing's outstanding shares) at a price of $62.75 per share. The tender offer
will commence within five business days and is expected to be completed next
month.
Annunziata, who was the founder of Teleport - the first competitive local
exchange carrier to compete head-on with regional Bell operating companies -
continued: "A decade and a half after the break-up of AT&T, competition in the
telecommunications industry has spread around the world. Today we are joining
forces with a former regional Bell operating company that knows how to compete
and offers customers a compelling array of integrated voice and data services."
Trujillo, who has created the country's most aggressive local supplier of high-
speed data services, said, "Rarely in business do we have the opportunity to
bring together two leading-edge companies to create a faster, more
entrepreneurial global competitor with unique products and solutions for both
residential and commercial customers. We are confident we can address any
regulatory issues and gain approval for the merger on a timely basis. In
addition to global scope and scale, this merger is also about innovation, speed-
to-market and superior customer service-true to the vision of Gary Winnick,
Global Crossing's founder and largest shareholder."
Annunziata and Trujillo will become Co-Chairmen and Co-CEOs of the combined
company. There will be a 22-member Board of Directors: 10 designated by Global
Crossing, 10 designated by U S WEST, and two selected by mutual agreement.
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3
The Board of Directors of U S WEST intends to declare a special cash dividend of
$0.215 per share payable to U S WEST shareholders in each quarter prior to
closing. This will increase U S WEST quarterly dividend payments to $0.75 per
share prior to closing. In addition, U S WEST intends to declare a one-time
special cash dividend of up to $1.00 per share (plus the proportionate share of
the unpaid special dividend in the quarter in which the merger closes) payable
to U S WEST shareholders immediately prior to closing.
Merger Benefits
Benefits of the merger, approved unanimously by the Boards of both companies,
include:
- - First Global and Local Service Provider with state-of-the-art domestic and
international backbone facilities and world-class data networking services.
- - High-quality, last-mile access; high-speed data and global reach; enhanced
ability to compete in the projected $1 trillion global telecommunications
market.
- - Leadership position in Internet services, applications support, web hosting
and e-commerce.
- - Greater ability for the local service provider to retain and grow large
business accounts in need of truly national or global voice, data and Internet
services.
- - Combination enables U S WEST, the nation's largest local digital subscriber
line (DSL) provider, to become a powerful national and global data local
exchange carrier.
- - Ability to enhance services in local markets.
- - Strong balance sheet to support further growth.
Composition of Tracking Stocks
The new Global Crossing Class G shares will include:
- - Global Crossing's state-of-the-art global fiber optic network, connecting four
continents and 39 cities in Europe, Japan and the Americas.
- - U S WEST's !NTERPRISE data networking business (including data network
integration services, Internet access, hosted applications and DSL services).
- - U S WEST's frame relay and asynchronous transfer mode (ATM) network, one of
the largest in the world.
<PAGE>
4
- - U S WEST's wireless PCS business.
- - U S WEST's Internet Yellow Pages directory business.
- - Frontier's state-of-the-art U.S. fiber optic network, connecting 120 cities.
- - Frontier's long distance business.
- - Frontier's GlobalCenter Internet web hosting and data center business.
- - Frontier's CLEC (competitive local exchange carrier) business.
- - New U.S. and international data local exchange carrier (DLEC) businesses.
The new Global Crossing Class L shares will include:
- - U S WEST's 16.6 million local telephone lines in 14 Western and Midwestern
states.
- - Frontier's 1.0 million local telephone lines.
- - The U S WEST Dex printed directory business.
- - Frontier's printed directory business.
The merger is expected to be immediately accretive to Global Crossing Class G
operating cash flow and to Global Crossing Class L earnings per share. The
transaction will be accounted for as a purchase, and is expected to be tax-free
to U S WEST and Global Crossing shareholders.
The new Global Crossing Corporation will be incorporated in Delaware,
headquartered in New York City, and have operations in Denver; Rochester, NY;
Los Angeles; the New York/New Jersey metropolitan area; Minneapolis; Phoenix;
Seattle; London; Tokyo; Amsterdam; Buenos Aires and many other locations
throughout the world.
The transaction is subject to the approval of shareholders of both companies,
expiration of the applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act, and approval by the Federal Communications
Commission and other regulatory review. It is expected to close by mid-2000.
Frontier has consented to the U S WEST transaction, and Global Crossing has
modified its merger agreement with Frontier to provide that the number of Global
Crossing shares to be received by Frontier shareholders will be adjusted to
provide a value of $63 per Frontier share as long as Global Crossing shares
trade within a range between $34.56 and $56.78 per share (the collar) during a
pricing period prior to closing of the Frontier transaction. Outside the collar,
Frontier shareholders will
<PAGE>
5
receive a fixed number of Global Crossing shares: 1.1095 shares per Frontier
share at the top end of the collar and 1.8229 shares per Frontier share at the
bottom end of the collar. If the Frontier transaction does not close by December
31, 1999, the $63 per share value will be increased by 7% per annum compounded
daily until closing (unless the Global Crossing share price is over the top end
of the collar). These modifications to the Global Crossing/Frontier merger
agreement will become effective only after shares are purchased in the U S WEST
tender offer for Global Crossing shares.
The transaction is another step in the execution of both companies' aggressive
growth strategies. In June 1998, U S WEST split off its cable assets, MediaOne
Group (NYSE: UMG), to concentrate on its telecommunications and Internet
businesses. Global Crossing announced in March 1999 that it would acquire
Frontier Corporation. Antitrust clearance has been received for the Frontier
acquisition, which is expected to close in the third quarter of 1999.
Salomon Smith Barney, Inc. and Chase Securities, Inc. served as financial
advisers to Global Crossing, and Merrill Lynch & Co. served as financial adviser
to U S WEST. J.P. Morgan & Co. is arranging a credit facility for the U S WEST
tender offer for Global Crossing shares.
About U S WEST
U S WEST provides a full range of advanced telecommunications services -
including wireline, wireless PCS, data networking, directory and information
services-to more than 25 million customers nationally and in some of the
nation's fastest growing communities in 14 Western and Midwestern states
(headquartered in Denver, its larger markets include Denver, Minneapolis,
Phoenix, Portland, Salt Lake City and Seattle). It is the nation's leader in the
deployment of digital subscriber line (DSL) technology. More information about U
S WEST can be found at www.uswest.com.
About Global Crossing
Global Crossing is building and operating the world's most advanced global fiber
optic platform for data, voice, video and Internet transmissions. The Global
Crossing network will span four continents and address 80% of the world's
international traffic. Global Crossing's operations are headquartered in
Hamilton, Bermuda, with offices in Los Angeles; New York City; Morristown, New
Jersey; San Francisco; Miami; London; Amsterdam; Tokyo; and Buenos Aires. More
information about Global Crossing can be found at www.globalcrossing.com.
Statements made in this press release that state either a company's or
managment's intentions, beliefs, expectations, or predictions for the future are
forward-looking statements. It is important to note that both companies'
actual results could differ materially from those projected in such forward-
looking statements. Information concerning factors that could cause actual
results to differ materially from those in the forward-looking statemetns is
contained from time to time in each company's filings with the U.S. Securities
and Exchange Commission (SEC) and is incorporated herein by reference. Copies of
these filings may be obtained by contacting either company or the SEC.
<PAGE>
6
Investors and analysts may contact:
Jensen Chow
310/385-5283
E-mail: [email protected]
Reporters and editors may contact:
Tom Goff
310/385-5231
E-mail: [email protected]
<PAGE>
Exhibit 99.2
Global Crossing / U S WEST
The New Premiere Global and
Local Service Provider
Bob Annunziata Sol Trujillo
CEO CEO
<PAGE>
2
Regarding Forward-Looking Statements
Statements made in this presentation that state the Companies' or management
intentions, beliefs, expectations or predictions for the future are forward-
looking statements. It is important to note that the Companies' actual results
could differ materially from those projected in such forward-looking statements.
Information concerning factors that could cause actual results to differ
materially from those in the forward-looking statements is contained from time-
to-time in the Companies' SEC filings. Copies of these filings may be obtained
by contacting the Companies or the SEC.
<PAGE>
3
Global Crossing / U S WEST / Frontier
. Creates Leading Global and Local Service Provider
. Customer-to-Customer Connectivity and Service Around the World
. Financial Structure Highlights Value and Promotes Growth
<PAGE>
4
The New Global Crossing
<TABLE>
<CAPTION>
Global Crossing Frontier U S WEST
Communications
<S> <C> <C>
International
Fiber Optic . US Fiber . Local Voice,
Network Optic Network Data,
. Data and Internet,
. Connecting Continents Internet and Wireless
. European Terrestrial . Long Distance Services
. Japanese Terrestrial . Local . Broadband
. South American Connectivity Access
Terrestrial . CLEC . Wireless and
Wireline
Network
. All-Digital
Data-Centric
Core Network
</TABLE>
World's Leading Global and Local Service Provider
<PAGE>
5
Global Reach/Local Service
<TABLE>
<CAPTION>
Global Connectivity Cities Customers
<S> <C> <C>
. Voice
Global House . xDSL
. Private Line
Cable . Switching . Integrated
. Routing Services
. Bandwidth Management
. Web Hosting
. Data Centers
</TABLE>
<PAGE>
6
Global Reach / Local Service
<TABLE>
<CAPTION>
[right [right
LOCAL arrow] NATIONAL arrow] GLOBAL
<S> <C> <C> <C>
IP / HOSTED APP U S WEST Frontier Global Crossing
DATA NETWORKS U S WEST Frontier Global Crossing
LONG DISTANCE NA Frontier Global Crossing
BACKBONE U S WEST Frontier Global Crossing
ACCESS U S WEST Frontier Global Crossing
Frontier CLEC Europe/Japan/
South America
</TABLE>
<PAGE>
7
Financial Structure Highlights Value
Business Financial Structure
Global Reach [right and left arrow] GSP - Global Service
Provider
Local Services LSP - Local Service
Provider
Value
Enhanced growth in GSP
Enhanced service in LSP
<PAGE>
8
The Transaction
Initial Tender Offer [right arrow] Corporate Alliance
. U S WEST to Tender Immediately for 9.5% of Global Crossing Shares
. $62.75 Per Share
. Cash Tender Commences Within Five Business Days
<PAGE>
9
The Transaction
The Merger
. Stock-for-Stock Merger of Equals - Following Global Crossing/Frontier
Merger
. Global Crossing/Frontier and U S WEST Shareholders Each Will Own 50%
. Each Global Crossing Share Will Represent 1.0 Shares and Each U S WEST
Share Will Represent Approximately 1.2 Shares in the New Company
<PAGE>
10
The Transaction
The Merger
. Each Share of the New Company Entitles the Shareholder to Elect a Mix of
GSP and LSP Tracking Stocks Subject to Proration If Either Is
Oversubscribed
. Tax-free, Purchase Accounting
. Closing Expected Mid-2000
<PAGE>
11
Amendment to Global Crossing/Frontier Merger Agreement
. Frontier Board of Directors has Consented to Global Crossing/ U S WEST Merger
. Assuming Completion of U S WEST Tender Offer for 9.5% of Global Crossing
Shares:
- Minimum Value to Frontier Shareholders Increased to $63
- Changed Exchange Ratio Range,
. Previous: 1.0919 - 1.7939
. Revised: 1.1095 - 1.8229
<PAGE>
12
U S WEST Special Dividends
. Until the Merger Closes, U S WEST Intends to Pay a Special Dividend of $0.215
Each Quarter Increasing the Quarterly Payment to $0.75 Per Share
. Immediately Prior to Closing, U S WEST Intends to Pay a Special Dividend of
$1.00 Per Share
<PAGE>
13
Two Tracking Stocks
<TABLE>
<CAPTION>
Global Service Provider Local service Provider
(GSP) (LSP)
<S> <C>
. Global Crossing Subsea . US WEST Local Exchange
and Terrestrial Global
Fiber Network . US WEST In-Region Long
Distance
. U S WEST !NTERPRISE Data
Activities . US WEST Private Lines and
Directory Operations
. Frontier US Fiber
Network, Internet, Data, . Frontier Local Exchange
and Long Distance
. Frontier CLEC Operation
. U S WEST Wireless and
Internet Yellow Pages
</TABLE>
<PAGE>
14
Two Tracking Stocks
Proforma 2000 Estimates*
Class G Class L
Global Service Local Service
Provider Provider
Revenue $ 6.0B $13.5B
Adjusted EBITDA $ 1.4B $ 6.7B
Proforma Growth Accelerates Global Enhanced Earnings
Profile Crossing EBITDA Visibility with
Growth to less than Stable Growth
40%
* Proforma as if merger closes January 1, 2000
<PAGE>
15
Local Service Provider Assets
. Distribution Channel for DSL and other Global Service Provider Products
. 17 million Local Access Lines
. Local Service in 25 States
. 7,800 SONET Rings
. $1.2 billion Vertical Services Revenue Stream
. $1.2 billion Revenues from Print Yellow Pages
. Attractive Demographics, Rapid Growth Region
<PAGE>
16
U S WEST Local Network
[Map showing the states of Washington, Oregon, Montana, Idaho, Utah, Arizona,
Wyoming, Colorado, New Mexico, North Dakota, South Dakota, Nebraska, Minnesota
and Iowa]
. 21 SONET ring network
. 94% digital switching
. Data switches
- 417 frame relay
- 133 ATM
. 40,444 miles of fiber cable across 14 states
. DSL in 215 wire centers
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17
Frontier Local Network
Local Access Lines
[Map showing the states of Florida, Georgia, Alabama, Missouri, Pennsylvania,
New York, Ohio, Minesota, Indiana, Illinois, Wisconsin, Louisiana and Montana as
Frontier services territory.]
. NY: 650,000
. Total: 1,034,000
. 34 Cities in 13 States
<PAGE>
18
Global Service Provider Assets
Fiber: 115,000 Route Miles / 2.85 Million Fiber Miles
Data: 173 ATM Switches
454 Frame Switches with over 70,000 Frame Nodes
35,000 DSL Customers
2,000 VDSL Customers
12 Web Hosting / Data Centers
U S WEST Internet Yellow Pages
$1.8 billion of Long Distance Revenue
less than 200,000 ISP Subscribers
Voice: 230,000 CLEC Lines
220,000 PCS Subscribers
Products: Global Voice, Video, Data and IP Applications
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19
Frontier DMS 500 Network
[United States map showing terminal sites and switches of Frontier DMS 500
Network.]
[Legend containing the following information:]
. Completed
. By the end of June '99
<PAGE>
20
Frontier National Network
[United States map showing coverage and routes of the Frontier national
network.]
[Legend containing the following information:]
Network Route Network Miles
------------- -------------
. Base Network - 24 Fibers 13,054 miles
. Southeast Build - 12 Fibers 2,985 miles
. Northwest Network Swap
(WTCI) 1,660 miles
. Western Network Swap
(Enron) 1,896 miles
. Frontier Terminal Site
. Frontier Switch
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21
From Local to National to Global Reach*
[World map showing the routes of PC-1, GAL, PAC, SAC, AC-1, MAC and PEC with
"Growth" indicated for undeveloped areas of Asia.]
*Based on announced networks
<PAGE>
22
Pan European Crossing
[Map of Europe showing the route of Pan European Crossing.]
. [Legend containing the following information:]
. Wholesale Switching
. DSL
. Data and Internet Services
<PAGE>
23
Global Fiber Network*
<TABLE>
<CAPTION>
Frontier New
Communi Global
Global Crossing -cations U S WEST Crossing
<S> <C> <C> <C> <C>
Route 54,900 20,000 40,444 155,344
Miles
Fiber 800,900 348,000 1,700,00 2,848,900
Miles
Count- 18 3 1 19
ries On
Network
Cities On 39 120 44 185
Network
Total Invest- $ 4.9 $ 1.1 $ 1.2 $ 7.2
ment in billion billion billion billion
Announ-
ced system
</TABLE>
*Based on Announced Networks
<PAGE>
24
Addressable Market Explodes
New Global Crossing
Global Crossing Frontier Communications US WEST
$100 billion + $100 billion + $35 billion
International National LD Local
Global Bandwidth and Services $ 1 trillion in 2005
Sources: IDC, ITU, Tom Soja & Associates, Yankee Group and Company Estimates
<PAGE>
25
World's Largest DLEC
Number of Subscribers
<TABLE>
<CAPTION>
1Q99 1999E Reach Market
Value
<S> <C> <C> <C> <C>
USW/GBLX 35,000 100,000 Global $ [arrow
pointing
upwards]
billion
Covad 8,6000 35,000 National $ 4.6 billion
North Point 3,200 NA National $ 5.3 billion
Rhythms 1,255 12,000 National $ 5.3 billion
</TABLE>
While serving 10% of the U.S. population, U S WEST has captured 40% of the
nation's DSL subscribers and 30% of the nations local frame relay ports. These
capabilities will be unleashed to national and global markets.
<PAGE>
26
Web Hosting and Internet Services
[Digital Distribution map]
. 12 Hosting / Distribution Centers
. Over 200,000 Dial-up Internet Customers
. 54 billion Hits per Month
. Extensive Line of Network-Based Applications
. Worldwide IP Network - Tier 1 Peering
. less than 100% Growth Rate
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27
Regulatory Environment
. No Approval Required for U S WEST to acquire 9.5% of Global Crossing Shares
. Combined Companies Prohibited from Originating Long Distance Traffic from U S
WEST Territories Pending Section 271 Approval
. Regulatory Approval for Merger is Expected
. U S WEST Section 271 Approval Efforts Accelerated
<PAGE>
28
Compelling Financial Profile
New Global Crossing*
Revenues less than $ 19 billion
Adjusted EBITDA less than $ 8 billion
Current Market Value less than $ 75 billion
*2000 Company Estimates - proforma as if merger
closed January 1, 2000
<PAGE>
29
Combination Offers Substantial Synergies
. Ability to Combine Back Office and Administrative Functions
. Post 271 Approvals - Owned Network Generates Enhanced Long Distance Margin
and Market Share
. Expand Existing GlobalCenter Web Hosting Business to Include Applications
Hosting via Worldwide Network
<PAGE>
30
Combination Creates New Market Opportunities
. Expansion of Existing DSL Technology to Global Markets With Suite of Existing
Data Products
. Expansion of Existing Voice, Data Transport, Internet Access and Vertical
Services to Global Markets Served by the Global Crossing Global Network
<PAGE>
31
Combination Offers Synergies and Opportunities
Net Present Value ($ Billions)
Market
Synergies Opportunities
Operating Efficiencies $1
Long Distance $2
Global 1 Hop $4
Loss of Bermuda Tax Benefit ($1)
National DLEC $3-6
International Voice, Data
Transport, Internet Access
and Vertical Services $15-30
------
TOTAL $6 $18-36
<PAGE>
32
From Local to Global Reach*
[World map showing the routes of PC-1, GAL, PAC, SAC, AC-1, MAC and PEC with
"Growth" indicated for undeveloped areas of Asia.]
*Based on announced networks
