COMPANY: FIRSTCOM CORPORATION
TICKER: FCLX
EXCHANGE: NASDAQ SMALL CAP MARKET
FORM TYPE: 425
DOCUMENT DATE: JULY 13, 2000
FILING DATE: JULY 13, 2000
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: FirstCom Corporation
Commission File No.: 001-14107
Keytech LD Investment Press Conference
Buenos Aires, Argentina
Thursday, July 13, 2000
Script for Speakers
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ORDER OF SPEAKERS:
Opening Remarks (2 Min.) Lydia Rodriguez
AT&T Latin America (7 Min.) Patricio Northland
AT&T Corp. (4 Min.) Edgardo Lertora
Keytech LD (5 Min.) Alex Rossi
Summation (1 Min.) Patricio Northland
Q&A Moderation (30 Min.) Lydia Rodriguez
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Keytech LD Investments Press Conference
Buenos Aires, Argentina
o INTRODUCTION OF SPEAKERS (Lydia Rodriguez)
(Patricio Northland will be introduced as current chairman and CEO of
FirstCom and the future chairman and CEO of AT&T Latin America, after the
AT&T Latin America merger with FirstCom)
Thank you, Lydia and good afternoon everyone.
It's good to be back in beautiful Buenos Aires. Thank you for joining us for
today's important announcement.
It was only a few short months ago that I was here to tell you about AT&T Latin
America's intent to acquire Keytech LD.
Today we're addressing more than just the close of a business deal. Without
doubt, the Keytech LD acquisition is a significant milestone to AT&T Latin
America's operation in Argentina and in the creation of AT&T Latin America. I
will speak in more detail about AT&T Latin America in a moment. But, today's
announcement has significance that goes far beyond a single company's business
plans.
Today's announcement is about competition and choice for customers. It's about
investment in technology and investment in people. It's about creating new jobs.
And it's about economic growth, development, and modernization for Argentina.
I am very pleased that AT&T Latin America has closed on our acquisition of
Keytech LD - as many of you may already know- but here's why I'm pleased. I
believe our close of the Keytech LD agreement is vitally important to our
prospective customers and the citizens of Argentina:
Today's worldwide economy thrives on telecommunications. It has been said that
telecommunications is the lifeblood of the world's new economy. Without a strong
telecommunications infrastructure and ready access to high-speed, high-capacity
services, few businesses can compete, let alone flourish, in today's economy.
And as the economy becomes increasingly global in scope, the reliance on
telecommunications continues to grow.
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And this requires modernization -- modernization of the Argentine
telecommunications industry by providing services that enhance the capabilities
of Argentine businesses. How? Modernization simplifies information technology,
cost control, operational efficiency, growth management, and customer and vendor
relationships are strengthened through virtual network features.
Modern networks and innovative telecommunications services do not create
themselves. Nor are they likely to be created in the absence of competition.
Competition drives investment and innovation. We've seen this happen again and
again around the world as countries have opened their telecommunications markets
to competition, customers have benefited and economic growth and prosperity have
followed.
That's why the action of the Argentine government to deregulate the
telecommunications industry is a vital first step to economic development. The
government's serious and aggressive plans to make the telecommunications
regulatory regime more competitive and the rapidly growing demand for advanced
and emerging telecom services are definitely attractive to investment. And
without an open telecommunications marketplace, the investment needed to kindle
competition would never be made and what a loss that would be to businesses,
consumers and the country as a whole.
I applaud the excellent progress made in setting regulatory standards that will
place Argentina at the forefront of the telecommunication's industry in the
region.
Our announcement clearly shows that an open marketplace -- one that welcomes
competition -- attracts the type of investment that leads to economic
development.
Today, in addition to the close of the purchase of Keytech LD, we are also
announcing that AT&T Latin America plans to invest 500 million dollars over the
next five years in building out its network here in Argentina.
And our investment is not only in the latest technology, but also in people. Our
investment in growing our network and our business in Argentina is expected to
lead to the creation of approximately 2,000 new jobs in this country.
(Pause to enumerate)
o 500 million dollars;
o approximately 2,000 new, high-skill jobs;
o deployment of a superior network consisting of
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- 2,500 kilometers of advanced fiber optic technology;
- with an interconnection of more than 40 cities, and
- 10,000 square kilometers of fixed wireless technology
are significant in themselves --- Alex Rossi will tell you more about our
technology and our network build-out in just a few minutes --- but think what
access to this new network will do. Think what it means to businesses in
Argentina.
A small exporter in Buenos Aires can have access to the same high-speed data and
Internet services as a multinational company. He can stand side by side with the
largest companies in the world and develop a global presence. He'll have the
same access to the same global markets as his largest competitors. His business
can grow and thrive and become worldwide because he has access to affordable
communications services.
Now multiply this one business by hundreds of businesses, thousands of
businesses. Think of the benefits, the economic growth and jobs that will be
generated and the impact that it will have on the Argentine economy and the well
being of its people.
That growth, that economic development and modernization, is what today's
announcement is all about.
(Pause)
Now, what does the Keytech LD acquisition mean to AT&T Latin America?
To expand its reach into Argentina, this acquisition makes good business sense.
It gives AT&T Latin America the presence, the licenses, time to market, all key
ingredients to compete effectively in-country and throughout the region.
The telecom market in South America represents a large opportunity. The business
sector in the region is ripe for expansion, too. It is expected to grow
significantly every year. Argentina is the second largest economy in the region
and is experiencing rapid growth and progress, especially in the
telecommunications industry. AT&T Latin America wants to be a part of
Argentina's progress, and a catalyst of greater economic growth.
Acquiring Keytech LD means AT&T Latin America is well on its way to establishing
a strong and thriving presence in all key economies in South America - Argentina
and Brazil, and after the merger with FirstCom, Chile, Colombia and Peru.
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With Keytech LD, AT&T Latin America will reach an even greater percentage of the
Latin American business communities and enjoy global connectivity through its
linkages with Concert and AT&T Global Network Services.
AT&T Latin America is proud to welcome Keytech LD and its employees into its
family. We are ready for the challenges that lie ahead, and we are ready to work
for our success.
Thank you.
Next, let me introduce Edgardo Lertora, Corporate Communications Vice President
for AT&T Corp.
o (Lertora presents)
Thank you Patricio
Good afternoon everyone! It's a pleasure to be here and by my accent I know you
can tell that this place is special for me.
And this announcement is very special and exciting for me - as an Argentine and
as an AT&T employee. I have been working in the international area for close to
30 years and have seen many changes in various industries. But what has held my
interest most is the telecommunications area and especially the
telecommunications area in Argentina. I've been watching it and I've been
working in it.
Today's announcement is very special to me. It's special to me because I am
proud of what it means to Argentina and especially pleased with the greater
implication of a deregulated and an open market attracting competition and
growth of Argentine business and modernization.
Over the last few months, AT&T Corp. has been working hard in executing its
international strategy of:
o Targeting business customers in the world's economic centers
o Delivering seamless services to MNCs and world travelers
o Building and operating a facilities-based global IP network
o Managing traffic to its lowest unit cost
o Providing Outsourcing and Professional Network Management Services
o Investing selectively for in-country Connectivity
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Many major steps have been taken to enter the Latin American market and solidify
our leadership as a global telecommunications company. These steps are what have
brought us here today.
We have kept you informed of these steps when we announced -
The formation of Concert -AT&T joined forces with BT to create Concert offering
a new suite of enhanced international voice, data, and Internet Protocol (IP)
services; combining trans-border assets, international networks and traffic.
Allowing us to have a global, facilities-based presence.
We kept you informed when we announced -
AGNS (AT&T Global Network Service) - AT&T acquired the IBM network business now
called AGNS, offering global and local Managed Data Network Services, Remote
Access Services, Custom Network Solutions and Network Outsourcing. It has a very
strong foothold in Latin America, with a presence in 13 countries. Out of those
countries
- Brazil is the largest, with local nodes in 31 cities;
- Argentina has 8 nodes
- Chile has 3 nodes in Santiago;
- Colombia has a total of 6 nodes; 3 in Bogota and one each in Cali,
Medellin and Baranquilla; and,
- there are 2 nodes in Lima, Peru.
We kept you informed when we announced -
The acquisition of Netstream -a local Brazilian IP based competitive exchange
carrier delivering voice, data, video and Internet services to the corporate
market. With operations in Sao Paulo, Rio de Janeiro and Belo Horizonte.
Netstream fills a strategic position for AT&T Brazil.
We kept you informed when we announced -
The creation of AT&T Latin America, a critical component of our plan to extend
our communications services and to reach local, regional and multinational
business customers across the region. We announced our plans to form the new
company that would be publicly traded, merging the operations of Netstream with
FirstCom, a publicly traded communications services carrier with advanced
IP-based networks and operations in Chile, Colombia and Peru.
o Pause
And I know that my friend, Patricio, who will lead AT&T Latin America after the
FirstCom merger, can tell you all you ever wanted to know about FirstCom.
We kept you informed when we announced -
Our intent to acquire Keytech LD - as Patricio mentioned earlier, we were here
in February to tell you that we intended to compete in Argentina's deregulated
environment.
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And most recently, we kept you informed when we announced -
We entered into a memorandum of understanding to explore the integration of AT&T
Global Network Services (AGNS) operations in South America into AT&T Latin
America. It is important to note that this is not a definitive agreement. We
announced an agreement to evaluate the transfer of AGNS assets, contracts and
licenses in South America, as well as the possible movement of employees to AT&T
Latin America.
All of these steps have lead us to you today, we're here to tell you about our
close on Keytech LD and investment in the future of Argentina's
telecommunications.
I think that's a pretty good story for the beginning of a new company - AT&T
Latin America.
However, AT&T Corp. is not a company that is just beginning. We have a rich
heritage of technology, innovation, and reliability. Our history extends back to
1876 - more that 100 years. AT&T Corp. serves more than 80 million residential,
corporate, and government clients throughout 280 territories across the world.
We have approximately 147,000 employees and $62 billion in revenues. The company
is known for its strong alliances, and strategic acquisitions. For example
throughout 1999, AT&T also forged alliances with Time Warner, Canada's Metro Net
Communications, and the Media One Group.
Today, we are here again to further demonstrate the extent of our commitment to
our mission of connecting Argentine business customers locally to partners,
services and other customers around the globe.
As you have heard, we are happy to announce that AT&T Latin America plans to
invest $500 million in Argentina through the year 2004 with the potential to
create approximately 2,000 jobs.
We are happy to be here, and want to share our excitement with you, our
partners, customers, and friends. Yes, These indeed are exciting times. The
Argentine telecommunication's industry has been worth watching and I'm glad that
we're a part of it.
(Pause)
Thank you!
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And now I'll turn the podium over to my friend and colleague, Alex Rossi, CEO of
Keytech LD, who will tell you more about the future of Keytech LD.
[English translation of Spanish script for Rossi speech]
Thank you Edgardo for your introduction.
Keytech LD was born in 1998 to offer services to large, medium and small size
companies because we understood the marketplace needed an option to allow those
companies to have access to integrated telecommunications solutions and value
added technology.
With this in mind, from the start-up of operations, we have always maintained
that our relationships with clients will be our priority by attending to each of
them in a personalized way and offering solutions that matched their needs.
To that end, we have begun to develop a broad range of integrated products and
services, which were innovative in themselves.
Keytech LD's goal is for clients to benefit from service simplification, cost
control and operating efficiency, including all the advantages of "One Stop
Shopping", that is, providing integrated services from a single point of
contact.
We are now part of one of the world's leading communications companies, and
that, coupled with the telecommunications sector's deregulation that Argentina
will enjoy beginning in November, will no doubt be a great market revolution. We
have an exciting prospect before us that will be, for all of us and for me in
particular, a great challenge.
Speaking of challenges, in a few days we will begin to build out our networks.
AT&T Latin America will begin this build out of the networks utilizing
technology never before used in Argentina that will allow for fast network
expansion. This technology will enable us and our clients to have a faster, more
reliable, more secure connectivity that will allow us to provide more services.
Ultimately, this means higher quality for users.
But I would like to revisit an issue already mentioned by Patricio, one that I
think is fundamental today in Argentina and that I would like to make clear: the
point related to the creation of jobs.
Our company is expected to generate 2000 new jobs via means of direct
employment. And as Patricio said that the profile of those jobs is for highly
skilled people. And these highly skilled employees are not for people brought
from abroad. These are 2000 highly qualified jobs for
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Argentineans. In fact, one of these cases is that of an Argentinean that has
been out of Argentina and will return to work for our company.
But also, we are going to generate many jobs through, for example, companies
with which we are subcontracting the build out of the networks. And I think this
will have an important multiplying effect.
And regarding the issue of employment and the professionalism of our people, I
would also like to make you aware of our plans to sign a number of agreements
with our country's most accredited technological universities. These agreements
will allow us a very fruitful exchange. We will benefit because we will have the
best young professionals of the marketplace and they will begin their careers
working in one of the most renowned companies in the market.
And in closing the things I have enumerated will finally result in the benefit
of our clients because we believe that beginning in November, those who will be
mostly benefited with these new innnovations are users and our dear country.
Finally, as the CEO of Keytech, I would like to thank you all here today,
because I know that the day and the time are not the ideal ones for your work
schedule, so thank you very much and good afternoon.
o (Rossi turns the podium back to Northland for closing comments.)
P. Northland (Summation)
And, now before we invite your questions, I'd like to summarize with a couple of
thoughts.
AT&T Latin America plans to be a leading facilities-based provider of integrated
high-bandwidth communications services to businesses throughout its Latin
America region.
Argentina and Keytech LD are anchors to solidifying its plans in the region.
We are truly committed to the market bringing more jobs, greater technology,
better quality in IT services to make a lasting difference. We have the
knowledge and experience to team with customers in the information technology
business to create and implement ideas that will result in a sustainable
competitive advantage.
Thank you.
(Pause)
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Now Lydia will moderate the Q&A session.
[Potential Answers to Expected Questions Prepared for Use at Press Conference]
TODAY'S ANNOUNCEMENT
1. What are you announcing today?
AT&T Latin America, the AT&T subsidiary that plans to merge with
FirstCom, is announcing:
- we expect to invest an additional $500 million in network
construction for our recently acquired subsidiary, Keytech LD;
- we expect approximately 2,000 new job opportunities to be created
through 2004.
2. How will the $500 million be invested?
AT&T Latin America intends to invest approximately $500 million through
2004 to develop Keytech LD's IP technology position. We expect to invest $150
million by mid-2001 and an additional $350 million through the year 2004.
3. In which cities will you operate?
The network build-out plans call for deploying fiber for broadband
transport in downtown Buenos Aires and its metropolitan area, and the cities of
Mendoza, Cordoba and Rosario, during the next two years. Other locations in the
interior will follow, eventually interconnecting more than 40 cities. The
coverage will be complemented with 10,000 square kilometers of fixed wireless
technology.
4. You announced an additional 2,000 jobs. When and where will that be?
Our growth projections include approximately 2,000 jobs in Argentina
through 2004. We expect to add them as the build-out progresses.
5. Will you address both the business and residential market?
No. We plan to focus on the business market.
6. What did you pay for Keytech LD?
- $5 million in cash and
- 1,178,689 shares of Class A common stock of AT&T Latin America.
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7. Why are you making this deal?
Argentina's economic environment, competitive and open market makes it
a very attractive country for foreign investment, especially in communications.
Growth is forecasted for the data market and emerging services such as Internet.
Keytech LD has nationwide licenses to provide domestic and
international long distance, data transmission and private networks from Nov.
2000 onwards. The coverage will be complemented with 10,000 square kilometers of
fixed wireless technology.
8. How long has Keytech LD been in operation and how many customers does it
have?
Keytech is a young start-up company. It has nationwide licenses to
provide domestic and international long distance, data transmission and private
networks from November 2000, which will give us a significantly reduced time to
market.
9. What are Keytech LD's annual revenues?
As a young start-up our current revenues are not significant at this
time.
10. What are your revenue projections?
We are not sharing our revenue projections.
11. What services does Keytech LD offer?
Keytech LD plans to offer integrated communications services to
business customers, including videoconferencing, domestic data transmission,
E-commerce services, Internet and value added services over its own facilities.
12. Will Keytech LD offer wireless services?
We have the rights to utilize 1910-1930 MHZ spectrum for fixed wireless
in nine of Argentina's largest cities.
13. What will AT&T Latin America's operation in Argentina be called?
AT&T Argentina
14. Who will head AT&T Latin America in Argentina?
Alex Rossi
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LOCAL ISSUES
1. Do you plan to provide service to residential customers?
Our strategy is to focus on business customers.
2. How many offices does AT&T plan to open in our country? And where will
they located?
At this time, I do not have any information to share, but AT&T Latin
America expects to open the offices necessary to fulfill its business strategy
for Argentina.
3. Does AT&T Latin America plan to operate/acquire cable signals in Latin
American countries?
AT&T Latin America has no plans to be a local or regional cable TV
operator.
4. Can you explain, then, the association with Liberty Group/Cablevision?
Liberty Media is a separate division of AT&T. It is managed
independently of AT&T Latin America and AT&T's other operations.
5. It has been said that the entry of new competitors into the market will
not result in a tariff drop for residential consumers, because the new
competitors have only focused on the most profitable business segment.
What do you think?
AT&T Latin America is focused on business customers. We are not in a
position to address the pros and cons of the profitability of the residential
market.
STRATEGY
1. How does this fit into AT&T Latin America's strategy?
It gives us entry into Argentina with plans for fiber optic technology
with an ATM/IP multi-service platform.
Argentina is a key market for international business and its
communications market is growing.
2. What is the strategy for AT&T Latin America?
Our strategy is to be a leading provider of broadband communications
services to business customers in the major Latin American markets where we
operate.
3. What did AT&T Latin America and FirstCom recently announce regarding
AGNS?
We entered into a memorandum of understanding to explore the
integration of the AT&T Global Network Services (AGNS) operations in South
America into AT&T Latin America.
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4. Will the AGNS network and the employees now be a part of AT&T LA?
It is important to note that this is not a definitive agreement. We
announced an agreement to evaluate the transfer of AGNS assets, contracts and
licenses and the possible movement of employees in South America to AT&T Latin
America. No definitive agreement has been reached and any agreement would be
subject, among other things, to board approvals, including AT&T Latin America's
board, and regulatory approvals.
5. What can you tell us about the MOU with AGNS?
We are just beginning our discussion on this possible integration and I
am not in a position to comment on your questions.
6. What is the size of the network in South America?
AGNS has a very strong foothold in Latin America, with a presence in 13
countries. Out of those countries, Brazil is by far the largest, with local
nodes in 31 cities, Argentina is the second largest with 8. Chile has 3 nodes in
Santiago, Colombia has a total of 6 nodes; 3 in Bogota and one each in Cali,
Medellin and Baranquilla, and there are 2 nodes in Peru. There are a total of 50
nodes in these five key countries.
7. But, don't you think AT&T Latin America is arriving late in Argentina?
Other companies have already invested in the region in recent years...
Today, Argentina's economic environment, competitive and open market
makes it a very attractive country for foreign investment, especially in
telecommunications. Growth is forecasted for the data market and emerging
services such as Internet.
We consider this moment to be the appropriate moment for our investment
plans in Argentina. We have measured our steps carefully and defined a strategy,
so as to maximize confidence in, and success of, our operations.
8. Why create a separate company for businesses in the region?
Creating a new company for the region means that its entire focus,
operations, assets and plans will be directed to making it a success where we
operate. We will not be distracted by business needs and issues in other parts
of the world. We are a local Latin American company with employees and
investments from this region and in this region.
AT&T Latin America intends to merge the best practices of AT&T and the
entrepreneurial spirit that has made FirstCom (which will become part of AT&T
Latin America after the pending merger), Netstream and Keytech LD into winning
companies.
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: The foregoing statements involve known and unknown risks and uncertainties
that may cause AT&T Latin America and FirstCom's actual results or outcomes to
be materially different from those anticipated and discussed in this press
release. Except for historical information contained in this press release, the
matters discussed contain forward-looking statements that involve risks and
uncertainties, including but not limited to economic, competitive, governmental
and technological factors detailed in the preliminary proxy statement described
below, which readers are urged to read carefully in assessing the
forward-looking statements contained herein.
In addition to FirstCom's filing of a preliminary proxy statement with
the United States Securities and Exchange Commission (the "SEC"), in connection
with the FirstCom/AT&T Latin America merger FirstCom will file a definitive
proxy statement and there will be an effective AT&T Latin America registration
statement on Form S-4. We urge investors and security holders to read the
definitive proxy statement and effective registration statement when they are
available before they make a decision concerning the merger. Security holders
may obtain a free copy of those documents (when available) and other documents
filed by FirstCom Corporation at the SEC's web site at www.sec.gov. In addition,
documents filed with the SEC by FirstCom may also be obtained from FirstCom
Corporation by directing such request to FirstCom Corporation, 220 Alhambra
Circle, Coral Gables, Florida 33134, Attention: General Counsel, Thomas C.
Canfield (305) 459-6300.
The members of the board of directors of FirstCom Corporation are
Patricio E. Northland, George Cargill, Andrew Hulsh and David Kleinman. As of
the date hereof, there are no other "participants in the solicitation," within
the meaning of Rule 14a-12 under the Securities Exchange Act of 1934, as
amended. Information concerning the directors is set forth in the Preliminary
Proxy statement filed with the SEC.
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