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): February 3, 1999
PATHNET, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-52247 52-1941838
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
1015 31st Street NW
Washington, DC 20007
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(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 625-7284
<PAGE>
Item 5. Other Events
On February 3, 1999, the Registrant issued two press releases. The first
announcing the Company's expansion of its integrated network strategy to
incorporate fiber in response to growing demand on selected routes (attached
hereto as Exhibit 99.1) and the Company's selection of Lucent Technologies to be
the exclusive supplier of fiber-optic cable for its nationwide, voice and data
network (attached hereto as Exhibit 99.2).
The foregoing information does not purport to be complete and is qualified
in its entirety by reference to the Exhibits to this Report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
Exhibit 99.1 Registrant's Press Release dated February 3,
1999, announcing the Company's expansion of its
integrated network strategy.
Exhibit 99.2 Registrant's Press Release dated February 3,
1999, announcing the Company's selection of Lucent
Technologies to be its exclusive supplier of
fiber-optic cable.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PATHNET, INC.
Dated: February 3, 1999 By:/s/ William R. Smedberg, V
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Name: William R. Smedberg, V
Title: Vice President,
Finance and Corporate Development
<PAGE>
EXHIBIT INDEX
PATHNET, INC.
Current Report on Form 8-K
Exhibit No. Description
Exhibit 99.1 Registrant's Press Release dated February 3, 1999,
announcing the Company's expansion of its integrated network
strategy.
Exhibit 99.2 Registrant's Press Release dated February 3, 1999,
announcing the Company's selection of Lucent Technologies to
be its exclusive supplier of fiber-optic cable.
Exhibit 99.1
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FOR IMMEDIATE RELEASE Contact: Becky Haight
Investor Relations
Pathnet
877 227-5600
[email protected]
Kye Presley-Dowd
Media Relations
Pathnet
202 295-3286
[email protected]
PATHNET TO BROADEN CURRENT WIRELESS STRATEGY
Expansion to Integrated Network Strategy Incorporates Fiber
in Response to Growing Demand on Selected Routes
Washington, DC, February 3, 1999 - Pathnet, Inc., a privately-held "carrier's
carrier" of digital telecommunications capacity to under-served and second- and
third-tier markets, today announced expansion of its business strategy to
include construction and deployment of digital networks utilizing both wireless
and fiber-optic technologies. Pathnet's integrated strategy represents a logical
broadening of earlier business plans relying primarily upon the development of
wireless networks. The company's decision to accelerate the incorporation of
fiber-optic facilities into existing plans for a nationwide digital network was
driven in significant part by strong demand from potential customers for
high-bandwidth facilities in under-served markets. Going forward, Pathnet plans
to construct and deploy fiber facilities on selected routes and integrate those
routes with its existing and future wireless facilities.
Pathnet has become a leading wholesale provider of high-quality, low-cost
digital telecommunications capacity by partnering with utility, pipeline and
railroad companies to upgrade and aggregate existing wireless infrastructure to
a state-of-the art SONET network. To date, the company has over 10,000 route
miles of network supply under contract. Pathnet's landmark strategy of
developing a low-cost digital network by upgrading, integrating and leveraging
its partners' assets, sites and rights-of-way will not change. The company's
expanded strategy will be implemented in the same way, and any decision to
deploy fiber facilities will be based on both anticipated customer demand and
the availability of rights-of-way as part of a partnering arrangement.
(more)
<PAGE>
"Our decision to expand the scope of our existing business strategy is
driven by two major factors; demand and opportunity," said Dick Jalkut,
Pathnet president and chief executive officer. "First, in marketing our
services to other carriers we have encountered growing demand for
high-bandwidth facilities that our wireless network is not equipped to
handle. Second, we continue to receive a growing number of proposals, from
both current and prospective partners, expressing interest in jointly
developing fiber-optic networks along their rights-of-way. We're very
pleased that our expanded strategy will enable us to capitalize on the
clear opportunity to match strong demand with economical supply," he added.
The additional capacity on selected routes resulting from deployment of
Pathnet's integrated network will enable long-distance carriers, Internet
service providers, cellular and PCS providers and local service providers,
including the Regional Bell Operating Companies to deliver advanced services to
areas that are currently under-served by digital networks. It will also enable
these carriers to aggregate traffic from cities in second- and third-tier
markets.
As of December 31, 1998, Pathnet had 2,000 route miles of completed network, an
additional 5,000 route miles of network under construction and 10,000 route
miles of network under contract. Pathnet provides commercial telecommunications
service to inter-exchange carriers, local exchange carriers, Internet service
providers, Regional Bell Operating Companies, cellular operators and resellers.
The company is a "carriers' carrier" providing high capacity, wireless and fiber
bandwidth to under-served and second- and third-tier markets. Pathnet's strategy
is to build low-cost telecommunications networks through partnering
arrangements. The company's headquarters are located in Washington, D.C., at
1015 31st Street, N.W., Washington, D.C., 20007. For additional information
about Pathnet, visit the company Web site at www.pathnet.net.
This press release contains some matters that are forward-looking statements.
The reader is cautioned that these forward-looking statements, such as plans to
sign additional agreements with private network operators; offer services to
telecom service providers; enter into partnering arrangements; build a digital
network; and statements regarding the development of Pathnet's business, and
other statements contained herein regarding matters that are not historical
facts, are only predictions. No assurance can be given that the future results
will be achieved; actual events may differ materially as a result of risks
facing Pathnet. For a discussion of factors that could affect the
forward-looking statements, see Pathnet's public filings on file with the
Securities and Exchange Commission.
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Exhibit 99.2
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FOR IMMEDIATE RELEASE
Contact:
Becky Haight
Pathnet --Investor Relations
877 227-5600
[email protected]
Kye Presley-Dowd
Pathnet -- Media Relations
202 295-3286
[email protected]
Mary Ward
Lucent Technologies
908 582-7658 (office)
[email protected]
PATHNET SELECTS FIBER FROM LUCENT TECHNOLOGIES FOR ITS NATIONWIDE NETWORK
Washington, D.C, Wednesday, February 3, 1999 - Pathnet, Inc., a privately
held "carrier's carrier" of digital telecommunications capacity to
under-served and second- and third-tier U.S. markets, announced today that
it has selected Lucent Technologies to be the exclusive supplier of
fiber-optic cable for its nationwide, voice and data network. The agreement
is initially valued at $440 million and could grow up to $2.1 billion over
the life of the seven-year agreement. This represents potentially the
single largest fiber supply agreement to a network operator in the United
States.
Pathnet previously announced plans to expand its business strategy from the
development of wireless networks to a broader, integrated strategy
employing both wireless and fiber-optic technologies in its networks. The
Lucent supply agreement provides a broad level of support to that effort,
including fiber-optic equipment, network planning and design, technical and
marketing support, and financing. Pathnet fiber facilities will be
constructed and deployed on selected routes, and the company will integrate
those routes with its existing and future wireless facilities.
Under the agreement, Pathnet will use Lucent's TrueWave (R) RS (reduced
slope) fiber, a revolutionary new fiber for long-distance networks
developed by Bell Labs. Lucent has agreed to provide equipment financing of
approximately $400 million for the first phase of the network construction.
Lucent may provide or arrange financing for future phases of the fiber
portion of Pathnet's network, in amounts of up to $400 million for each
phase, provided Pathnet fulfills mutually agreed upon terms. The total
amount of financing over the life of this seven-year agreement is not to
exceed $1.8 billion.
"Pathnet's plan has long been to create the industry's most extensive,
low-cost network coverage to the under-served and second- and third-tier
markets for voice, data and Internet carriers," said Dick Jalkut, president
and chief executive officer of Pathnet. "Our relationship with Lucent
allows us to leverage our early wireless success while giving us the
flexibility to accelerate complimentary fiber development over the next
several years."
<PAGE>
"We are extremely pleased to be part of Pathnet's plans for a
high-capacity, data and voice network, and we're delighted they chose our
industry-leading TrueWave fiber," said Nina Aversano, president, North
America for Lucent's Global Service Provider business. "The combination of
Lucent's expertise in designing networks, our relationships within the
industry and Pathnet's innovative approach to creating a nationwide network
gives service providers an efficient way to meet the ever-increasing demand
from their customers for more bandwidth."
Pathnet will continue to rely on its traditional approach of partnering
with railroads, pipelines, utilities and other owners of telecommunications
assets for rights-of-way throughout the United States. Pathnet expects that
by broadening its partnering arrangements to include fiber, it will be able
to offer customized networks to service providers. Through partnering,
co-development and the establishment of anchor tenants, the company expects
to minimize the costs of its retained network. Pathnet will utilize
Lucent's fiber products to deliver bandwidth services as well as dark or
dim fiber to customers requiring dedicated network services in markets that
are currently under-served. As with its wireless network, Pathnet will
serve as the network designer and project manager for the overall fiber
build-out.
Lucent Technologies has the largest combined optical fiber and fiber cable
operations in the world. TrueWave RS fiber is part of the company's award
winning TrueWave product line and represents the next-generation in fiber
optics, giving long distance providers increased capacity and a
future-proof solution for emerging high-speed Dense Wavelength Division
Multiplexing (DWDM) systems. It is manufactured in Lucent's Atlanta Works
facility.
Lucent Technologies designs, builds and delivers a wide range of public and
private networks, communications systems and software, business telephone
systems and microelectronic components. Bell Labs is the research and
development arm for the company. More information about Lucent
Technologies, headquartered in Murray Hill, N.J., is available on its Web
site at www.lucent.com.
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As of December 31, 1998, Pathnet had 2,000 route miles of completed
network, an additional 5,000 route miles of network under construction and
10,000 route miles of network under contract. Pathnet provides commercial
telecommunications service to inter-exchange carriers, local exchange
carriers, Internet service providers, Regional Bell Operating Companies,
cellular operators and resellers. The company is a "carriers' carrier"
providing high capacity, wireless and fiber bandwidth to under-served and
second- and third-tier markets. Pathnet's strategy is to build low-cost
telecommunications networks through partnering arrangements. The company's
headquarters are located in Washington, D.C., at 1015 31st Street, N.W.,
Washington, D.C., 20007. For additional information about Pathnet, visit
the company Web site at www.pathnet.net.
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This press release contains some matters that are forward-looking
statements. The reader is cautioned that these forward-looking statements,
such as plans to sign additional agreements with private network operators;
offer services to telecom service providers; enter into partnering,
co-development and anchor tenant arrangements; building a digital network;
and statements regarding the development of Pathnet's business, and other
statements contained herein regarding matters that are not historical
facts, are only predictions. No assurance can be given that the future
results will be achieved; actual events may differ materially as a result
of risks facing Pathnet. For a discussion of factors that could affect the
forward-looking statements, see Pathnet's public filings on file with the
Securities and Exchange Commission.
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Editor's Note: For more information on Pathnet's business strategy, please refer
to Pathnet's press release issued earlier this morning, or call Pathnet at
202-295-3286.
