ZURICH, Switzerland, June 12, 2001 (PRIMEZONE) -- At its first annual investor meeting in London, Carrier1 (Nasdaq:CONE), a leading European provider of end-to-end Internet, voice, bandwidth, data-center and access solutions to large users of communication services, sounded an upbeat note about its market opportunity, its objectives for the future and the key factors for its success.
"We are not going to try to outguess the various scenarios that might occur," said Victor Pelson, chairman of Carrier1. "We are going to focus on those business principles that will ensure success regardless of how this industry evolves. Continued, steady growth in demand for communication services, coupled with solid financials and shrinking competition, will drive Carrier1 and make us a solid player in the European telecom scene."
"Carrier1's mission is the same now as it was in our 2000 IPO: to be a facilities-based provider and enabler of voice, Internet and managed bandwidth services to large communication users in the "New business map of Europe," said Stig Johansson, president of Carrier1. "We have not succumbed to the 'thick build, quick return' philosophy. We have remained true to our mission, and it is paying off today." Johansson cited several key reasons:
-- a cost-efficient, 14,000 km long-haul infrastructure, built for
approximately $500 million, enabling Carrier1 to have one of the
largest footprints in Europe without a large debt burden
-- a high-volume, high-end customer base built on key contracts with
companies such as AOL -- which uses Carrier1 voice and dial-up
services in the UK and Germany -- enabling Carrier1 to derive most
of its revenue from players who are likely to survive. We intend
to migrate these customers from voice-based to more sophisticated-
and profitable-data and broadband services
-- a commitment to remain one of the top three providers of high-
speed Internet connectivity in Europe, thanks to the completion of
13 metro fibre rings by the end of next year. Two of these rings
are completed or in expansion, in Paris and Amsterdam, and an
additional eight are on schedule to being completed by year-end.
Alex Schmid, Carrier1's chief financial officer, pointed to solid financials as a key to Carrier1's success and its ability to weather current market conditions:
-- a fully-financed business plan, with a cash position of
approximately $200 million by the end of 2001
-- rapidly increasing revenues: $262 million in 2000 versus $97
million in 1999, and Q1 revenues of $89M this year, putting the
company on track to reach its predicted $400 million revenue
guidance for 2001
-- a commitment to be EBITDA breakeven for the year excluding bad
debt expenses, with positive free cash flow not far behind due to
a manageable interest expense and depreciation charges
-- reduced CAPEX for 2001 to meet market conditions, coupled with
reduction in under-performing accounts, and sufficient capital set
aside to pursue our growth objectives
"As our competition falters or disappears because of crushing debt burden, we are in an excellent financial position to grow by focusing our sales force towards advanced data services and by seizing the opportunities our competitors leave behind," Mr. Schmid said.
Mr. Johansson predicted Carrier1 would grow in the coming years by adding three or four large customers comparable to AOL, and introducing more sophisticated data and broadband services, including:
-- IP VPN services, which will enable customers to virtually manage a
telecom network for its own needs
-- VISP (virtual ISP) services, with multiple functionality's and
applications
-- Switched bandwidth-on-demand services and advanced broadband
solutions targeting specific needs in several sectors such as
broadcast and media, banking and manufacturing
Mr. Johansson also noted that Carrier1 has taken advantage of the current European telecom shakeout by acquiring seasoned and sophisticated management personnel, from board members to tech managers to marketing and sales representatives. The meeting began with the introduction of Mr. Pier Carlo Falotti, joining as a new member of the Carrier1 board of directors. Falotti was most recently senior vice president and member of the executive committee of Oracle. Prior to that, he served as president and CEO of AT&T Europe. Falotti is the second change to the board in as many months, the first being Mr. Victor Pelson's nomination as Chairman of the Board. Mr. Pelson is the former Chairman of Global Operations for AT&T.
"Thanks to telecom deregulation and open competition in Europe, we went from unrealistic highs to unrealistic lows in a very short period," Pelson concluded. "But history teaches us that the telecom business is robust. It continues to grow by 15-20 percent per year, even in these 'lean times.' That demand, coupled with a shrinking number of competitors and a growing recognition of our brand by our customers, means carriers, corporations and high-volume customers in this space will come to us sooner. They recognize Carrier1 because they understand the Carrier1 mission: to support their expansion across the new business map of Europe. Customer recognition, coupled with our solid financials, our large footprint and our growing management expertise, is why Carrier1 will survive, grow and give value to our shareholders, in this environment and beyond."
About Carrier1
Carrier1 International S.A. is one of Europe's top providers of large system solutions for end-to-end Internet, broadband, voice, data-center and dial-up access communications to large users of telecommunications services with a network that spans 14,000 contracted route kilometer's in 13 countries, and links 35 European cities. Carrier1 provides its clients with carrier-grade transport and network solutions as well as end-user-ready, value-added services that customers then brand and market to their respective users.
Forward-Looking Statements:
The information contained in this press release contains "forward-looking" statements within the meaning of the U.S. federal securities laws. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "plans," "estimates," "may," "will," "should" or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks, uncertainties and assumptions.
These statements include those regarding (i) our focus and its impact, (ii) the expected growth for communications services, our financial strength and the reduction of competition, (iii) the creditworthiness of the customers from whom we derive most of our revenue, (iv) our aim of becoming one of the top three providers of high-speed internet connectivity in Europe, (iv) the deployment of our metro fiber networks and the timing thereof, (v) our ability to withstand the current market conditions and the underlying factors, including our business plan being fully-funded, our year-end cash position, our 2001 revenue, our EBITDA being breakeven by year end excluding bad debt expenses, and our positive free cash flow position shortly thereafter (and the underlying reasons therefore, our 2001 capex, reduction in under-performing accounts and capital sufficiency for our growth objectives, (vi) the continued reduction in competition and the resulting opportunities expected for Carrier1, (vii) our expected growth by focusing on large customers and introducing certain new value added services, (viii) the market conditions for telecom services and its continued growth, and (ix) our financial, operational and competitive position and the anticipated impact on Carrier1 in the short and long term.
These statements are based on the current expectations of the management of Carrier1 and performance is subject to risks, uncertainties and other factors that could cause actual results to differ materially from these statements. Such risks include but are not limited to, the deterioration of the market economy, including in Europe and the technology and telecommunications segments, the deterioration of the financial strength of our customer base, adverse regulatory, technological, judicial or competitive developments; decline in Carrier1's services or products; inability to timely develop and introduce new technologies, products and services; pressure on pricing resulting from competition; unforeseen construction delays and failure to receive on a timely basis necessary permits or other governmental approvals, failure to obtain any necessary financing if management's business plan assumptions are not met, performance failure by third parties with whom Carrier1 has contracted including for the supply or maintenance of infrastructure components and by joint venture partners; the risk of termination of certain joint ventures through which Carrier1 operates; the amount of indebtedness incurred by Carrier1 and its obligations thereunder.
For a more detailed discussion of these risks, uncertainties and other factors affecting the Company, please refer to the Company's prospectus and periodic reports filed with the U.S. Securities and Exchange Commission on Form 10-K, 10-Q and 8-K, including its 10-K for the year ended Dec. 31, 2000 and its 10-Q for the quarter ended 31 March 2001. Corresponding filings are available at the Frankfurt Stock Exchange.