Company Press Release
QWEST ANNOUNCES INDUSTRY LEADING HIGH
PERFORMANCE IP NETWORK AND ACQUISITION OF ICON
CMT INTERNET-SOLUTIONS COMPANY
LEADING GLOBAL COMMUNICATIONS COMPANY ALSO TO PROVIDE HOSTED "CYBERCENTER"
CAPABILITIES
NATIONAL ACCOUNTS DIVISION ESTABLISHED TO SELL HIGH-BANDWIDTH SERVICES TO
MULTINATIONAL CLIENTS; FIRST CUSTOMER FOR NEW NETWORK SERVICE ALSO ANNOUNCED
DENVER--(BUSINESS WIRE) --Sept. 14, 1998-- Qwest (NASDAQ:QWST - news) today
announced several initiatives designed to accelerate its leadership in the
developing world of broadband multimedia services. The company said it will
initiate the first broadscale deployment and activation of a massive Internet
Protocol (IP) nationwide network that will give customers access to
unprecedented bandwidth for multimedia applications; the acquisition of Icon
CMT, a leading Internet solutions company; the establishment of 10 hosting
CyberCenters; the creation of a National Accounts division to sell IP services
to multinational customers and a $36 million agreement with Rudin Management
Company Inc. for OC-48 IP services.
Commercially available on November 1, 1998, the nationwide OC-48 IP network will
offer some of the industries' most aggressive service level agreements including
100 percent network availability. In addition, Qwest announced new IP services
including high-speed dedicated Internet access with speeds up to OC-48, IP-based
VPN services and an expansion of its Q.Talk voice over IP network service.
The company is also entering the web hosting business and will establish 10
major CyberCenters for customer hosted applications. By the end of this year the
company plans to open CyberCenters in San Francisco, Los Angeles, New York, and
Washington, D.C. The remaining centers in Seattle, Dallas, Chicago, Detroit,
Atlanta and Miami will be open in 1999.
To support Qwest's deployment of new offerings that integrate data services into
IP architectures, the company announced the creation of a National Accounts
division and acquisition of Icon CMT Corp. [Nasdaq:ICMT news], a leading
provider of integrated web solutions including Internet hosting, access, backup
and professional services in IP integration.
"Qwest was built to change the world of communications, and that is what we
continue to do," said Joseph P. Nacchio, president and CEO of Qwest. "With the
introduction of our OC-48 IP network, we are driving the development and
availability of web-enabled and e-commerce applications at performance and
pricing levels that will significantly enhance the productivity of business
solutions."
Suite of New Products and Usage-Based Billing Delivered to Customers
The Qwest OC-48 network will set a new standard for high performance and will
also deliver to customers usage-based billing and pricing. Customers will have
access to a highly reliable source for virtually unlimited bandwidth to support
sophisticated multimedia, e-commerce and data applications without the cost of a
dedicated leased line.
With these new services and resources complementing the Qwest Macro Capacity
Fiber Network and deployment of OC-48 in 1998, Qwest is now offering its
customers second-generation IP services while competing networks remain under
construction. These new transport services and applications include:
O High-Speed Dedicated Internet Access: Qwest offers customized
Internet solutions including dedicated OC-48 connections for '
bandwidth intensive customer needs such as e-commerce,
video-on-demand and other key data applications.
O Web Hosting: The Qwest Macro Capacity Fiber Network allows the
company to be the most flexible provider of high-performance,
scalable and secure Web hosting services, providing customers
with dedicated access to the Internet, intranets and extranets
at up to OC-48 speeds.
O IP-VPN services: IP-based VPN services will be deployed in two
phases - for premise-based VPNs (starting in Q1 '99) and
network-based VPNs (by Q2'99), delivering unprecedented
security and reliability.
The OC-48 network will also allow Qwest to significantly enhance its existing
services, including:
- -- Voice over IP: Q.Talk, Qwest's voice over IP network service, will be
expanded to 125 cities in 29 states by the end of 1998. Pricing remains at 7.5
cents per minute with Q.Talk's unsurpassed quality. New features to be added in
Q4 `98 include voicemail, speed dialing, calling card and audio conferencing.
Acquisition of Icon CMT Corp.
Qwest also announced today that it has agreed to acquire Icon CMT Corp. in an
all stock transaction valued at approximately $185 million. Icon is a leading
Internet solutions provider offering Web hosting, Internet connectivity and
professional services to its business customers. This acquisition supports
Qwest's entry into the Web hosting and Web enabling market for large business
customers. Icon had revenues in 1997 of approximately $52 million, and 1998
revenues are expected to reach approximately $80 million.
"We're delighted to be joining Qwest to leverage their low-cost high-speed
network, extensive distribution channels and state-of-the-art back office
systems. This will allow us to accelerate our business and deploy high-speed
connectivity for our customers on a global basis," said Scott Baxter, CEO of
Icon.
Icon, one of the pioneers of Web site design and end-to-end management, provides
Internet solutions for financial, media, travel and pharmaceutical markets and
other information-intensive industries. Icon clients include Bear Steams,
Merrill Lynch, CBS, Swissotel and Pfizer. Icon is headquartered in Weehawken,
New Jersey, and has over 400 employees, most of which are IT professionals.
The acquisition will be accounted for as a purchase. The closing is subject to
the satisfaction of certain customary conditions, including the approval of
Icon's stockholders and the receipt of applicable anti-trust and securities law
approval. The parties expect to consummate the acquisition within 90 days.
The actual number of shares of Qwest common stock to be exchanged for each Icon
share will be determined by dividing $12 by a 15-day volume weighted average of
trading prices for Qwest common stock prior to the Icon stockholders meeting
that will be called to approve the transaction, but will not be less than .3200
shares (if Qwest's average stock price exceeds $37.50) or more than .4444 shares
(if Qwest's average stock price is less than $27.00).
Qwest has also agreed to advance up to $15 million to Icon (January 31, 2000) to
fund working capital requirements and for other corporate purposes. In
consideration for this commitment, Icon issued to Qwest a warrant to purchase up
to 750,000 shares of Icon stock at $12 per share. Icon's three founders also
entered into agreements with Qwest to vote to approve the merger and to grant
Qwest an option on their shares. The warrant and options together give Qwest
beneficial ownership of approximately 44% of Icon's common stock.
"Icon's experience in helping businesses convert legacy systems to Web-based
applications will help us provide end-to-end Internet solutions," said Larry
Bouman, executive vice president of product development and multimedia services
for Qwest. "Expanded bandwidth, lower pricing and higher reliability are
compelling to
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businesses seeking to exploit the new Internet-oriented economy. But what's
truly convincing is the opportunity to completely outsource the development,
deployment and management of their overall Internet, intranet and extranet
strategy. Instead of chasing the moving target of Internet technology, our
customers can now focus on how they want to use the Web for business
applications."
The Icon hosting centers in San Francisco and New Jersey will complement
existing Qwest centers in the U.S. and throughout Europe. The new 50,000 square
foot Qwest CyberCenters will offer a broad range of Web hosting and multimedia
applications to customers.
Formation of National Accounts Sales Division Announced
Qwest also announced the formation of a National Accounts sales division, to be
headed by Shaun P. Gilmore, senior vice president of national accounts at Qwest.
Gilmore was formerly president of Snyder Direct, a company specializing in
direct marketing and account management. Prior to Snyder, Gilmore was with AT&T
for 16 years, where he had held a number of management positions in the business
markets, product management and sales divisions. This expansion is consistent
with Qwest's continued growth and acceleration in the multinational and Fortune
1000 segment. Customers who have recently purchased services from Qwest include
Bear Steams, CBS, Colgate-Palmolive, NBC, Nortel, PointCast, and Rollins Leasing
Corp. The new division servicing multinational customers is currently staffed by
more than 100 account managers, growing to 180 by year-end and to 300 by Q1 '99.
Industry's First Major OC-48 IP Customer Unveiled
Rudin Management Company, Inc. will become the first customer to take advantage
of the live OC-48 architecture on the Qwest IP backbone. The commercial real
estate firm has signed a two-year agreement valued at an estimated $36 million
to allow its tenants to receive OC-48 services "direct to the doormat" at select
Rudin locations, including its New York Information Technology Center at 55
Broad Street in Manhattan, N.Y. (www.55broadst.com), the Long Island Technology
Center at I Sunrise Highway in Great River, N.Y., The Reuters Building at 3
Times Square and at 110 Wall Street.
The agreement signifies one of the largest IP agreements to date to deliver
Web-enabled applications to businesses who want to leverage the power of the
Internet for competitive business advantage and network cost savings. The
network will allow Rudin to provide multimedia services such as video
conferencing, whiteboarding and distance learning to its tenants over the Qwest
OC-48 IP backbone.
"We are delivering our customers a competitive edge in business by enabling them
with the latest business applications, over the fastest, most reliable and
cost-effective network available. We're bringing it right to their doors in the
most progressive, commercial properties in the world," said Bill Rudin,
president of Rudin Management Company, Inc.
About Icon
Icon CMT Corp. is an Internet solutions provider that combines strategy and
creativity with a tier-one communications infrastructure to design, develop,
deploy and manage interactive, integrated solutions that leverage the Internet
as a competitive weapon for Fortune 1000 companies. Founded in 1991, Icon is
traded on the Nasdaq under the symbol ICMT. Additional information about Icon is
available through the company's Web site at www.icon.com, or by calling
1-800-ASK-ICON (275-4266).
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About Rudin
Rudin Management Company, Inc. is the management arm of The Rudin Family,
developers and owners of one of New York's largest privately owned commercial
and residential real estate portfolios totaling 36 properties and consisting of
approximately 9 million square feet of office space and 22 apartment buildings.
The Rudins are also the developers and owners of the world-renowned New York
Information Technology Center at 55 Broad Street.
The Qwest Macro Capacity Fiber Network
Qwest's planned domestic 18,449-mile network will serve over 130 cities, which
represent approximately 80 percent of the data and voice traffic originating in
the United States, upon its scheduled completion in the second quarter of 1999.
To date, approximately 8,850 miles of the Qwest Macro Capacity Fiber Network are
activated, and construction has commenced on 17,773 miles. Qwest's
transcontinental segment extends from Los Angeles to Sacramento and across to
New York. Additionally, Qwest owns transatlantic submarine capacity linking the
United States to Europe and will jointly own a transpacific submarine cable
system connecting the U.S. to the Pacific Rim. Qwest is also extending its
network 1,400 miles into Mexico with completion slated for late 1998.
The Qwest Macro Capacity Fiber network is designed with highly reliable and
secure bi-directional, line switching OC-192 SONET ring architecture. Upon
completion, the network will offer a self-healing system that provides the
ultimate security and reliability by allowing instantaneous rerouting in the
event of a fiber cut.
About Qwest
Qwest Communications International Inc. (NASDAQ: QWST - news) is a multimedia
communications company and one of the fastest growing companies in America
today. Headquartered in Denver, Colorado, Qwest has approximately 6,000
employees and over 80 sales offices worldwide. With its world-class data and
multimedia network, marketing expertise, and customer care and billing systems,
Qwest is delivering high-quality data, video and voice connectivity securely and
reliably to customers around the world. Further information is available at
www.qwest.net.
This release may contain forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual future events
or results. Readers are referred to the documents filed by Qwest with the SEC,
which identify important risk factors that could cause actual results to differ
from those contained in the forward-looking statements, including, but not
limited to, (a) failure by Qwest to construct the Qwest Network on schedule and
on budget, (b) failure by Qwest to obtain and maintain all necessary
rights-of-way, (c) intense competition in Qwest's carrier services and
communications services markets, (d) rapid and significant changes in technology
and markets, (e) dependence on new product development, (f) operating and
financial risks related to managing rapid growth, integrating acquired
businesses, being highly leveraged and sustaining operating cash deficits and
(g) adverse changes in the regulatory environment. These cautionary statements
should be considered in connection with any subsequent written or oral
forward-looking statements that may be issued by Qwest or persons acting on its
behalf. Qwest undertakes no obligation to review or confirm analysts'
expectations or estimates or to release publicly any revisions to any forward
looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
This announcement is not an offer to sell or a solicitation to buy any
securities of Qwest. The offering with respect to the proposed acquisition of
Icon will be made only by the proxy statement/prospectus that will be
distributed to stockholders of Icon in connection with their consideration of
the transaction.
The Qwest logo is a registered trademark of Qwest Communications International
Inc. in the U.S. and certain other countries.
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CONTACT INFORMATION:
QWEST CORPORATE CONTACT: QWEST INVESTOR CONTACT: QWEST MEDIA CONTACT:
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Qwest Communications Qwest Communications Alexander Communications
Christy Weiner Lee Wolfe Mary Stromberg
(303) 992-2085 (800) 567-7296 (303) 615-5070 x130
CHRISTINE.WEINER@QWEST.NET LWOLFE@QWEST.NET MSTROM@ALEXANDERCOM.COM
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HTTP://WWW.QWEST.NET HTTP://WWW.QWEST.NET HTTP://WWW.ALEXANDER-PR.COM
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