IDT Corp. Establishes Stabilization Plan for WorldCom Customers
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IDT (1-800-CALL-IDT) Offers MFS and MCI/WorldCom customers Low-Cost Standby and Back-Up Service
NEWARK, N.J. – July 5, 2002 – IDT Corporation (NYSE: IDT.B, IDT), a leading multinational carrier and telephone company, today announced that it has established a plan to protect WorldCom customers and help insure that they have continued and uninterrupted high quality telecommunications service in case of any shut down of the WorldCom network whether caused by bankruptcy, work stoppage, vandalism or any other unforeseen reason.
“We want WorldCom customers to keep their existing service. A business without customers doesn’t have much value these days. We want to keep the customers at WorldCom, so it will still be worth something when we buy it or take it over,” said Howard Jonas, IDT Chairman. “We have established a stabilization plan to provide back-up and alternative service, so that WorldCom customers have no reason to leave.”
It has been well publicized that IDT has made an offer for WorldCom’s MFS and Brooks Fiber, units and MCI’s consumer and small business long distance business. IDT also announced that it may include other financial and /or telecommunications parties as partners. Communications between IDT and WorldCom are underway. MFS and Brooks Fiber, like Winstar, provide a real alternative and competition to the local telephone company monopoly.
“This not a marketing strategy to gain market share. WorldCom customers are already flocking to IDT and the other major carriers,” said Jim Courter IDT’s CEO. “IDT’s Stabilization Plan is only about stopping the hemorrhaging of customers at WorldCom and preserving competition in the telecommunications industry. We believe that everything is in place to make a deal, and we don’t want customer attrition to get in the way, while negotiations between IDT and WorldCom and creditors move forward.”
IDT’s stabilization plan has two elements. Under the first, customers of WorldCom’s MFS and Brooks Fiber units can supplement their existing service by taking advantage of Winstar’s local access network. Winstar can provide those customers with highly reliable voice and data connections as a backup for their WorldCom service. Additionally, because Winstar's proprietary network does not utilize the last-mile wiring or network of the incumbent monopoly carriers, it provides redundancy for businesses seeking back-up service. This redundancy enabled Winstar to provide uninterrupted telephone service in lower Manhattan to customers and to the federal government’s disaster relief operations following the September 11th attack on the World Trade Center towers.
“Winstar is in a unique position to set up standby voice and data service for those MFS and Brooks Fiber customers who want it, for a fraction of what they currently pay for telecommunications,” said Brian Finkelstein, CEO of Winstar.
Under the second element of the plan, MCI’s consumer and small business long-distance customers can call IDT for special account numbers that will allow them access to the IDT long distance network, where they will pay the same or in most cases, less than they pay currently for MCI long distance. WorldCom customers can call 1-800-CALL-IDT for either IDT or Winstar service.
IDT is appointing a special blue ribbon committee of members of its boards of directors to oversee the stabilization plan.
“WorldCom customers and America can feel secure,” Howard Jonas added. “I believe that WorldCom customers now have a safety net, and there should be no resulting threat to national security, however the WorldCom saga ends.”
IDT CORPORATION
IDT, through its IDT Telecom subsidiary, is a leading facilities-based, multinational carrier that provides a broad range of telecommunications services to its retail and wholesale customers worldwide. Through its own national telecommunications backbone and fiber optic net work infrastructure, IDT Telecom provides its customers with integrated and competitively priced international and domestic long distance telephony and prepaid calling cards. IDT Media is the IDT subsidiary principally responsible for the Company’s initiatives in media, new video technologies and print media.
Through its various subsidiaries, IDT has interests in several telecom, Internet-related and media companies. IDT recently acquired Winstar Communications. IDT Corporation common shares trade on the New York Stock Exchange under the ticker symbols IDT.B and IDT. As of June 10, 2002, there were 53.4 million shares of Class B common stock (IDT.B) outstanding, and 24.9 million shares of common stock (IDT). Of these, 4.0 million shares of Class B common stock and 5.4 million shares of common stock were held by units of IDT Corporation.
Except for historical information, all of the expectations and Assumptions contained in the foregoing are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and the Securities Exchange Act of 1934, involving risks and uncertainties. These statements refer to our plans to implement our growth strategy, improve our financial performance, expand our infrastructure, develop new products and services, expand our customer base and enter international markets. The forward looking statements also include our expectations concerning factors affecting the markets for our products, including the demand for long distance telecommunications, and Internet access services. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results that we anticipate. These risks and uncertainties include, but are not limited to, those risks discussed in this release. In addition to the factors specifically noted in the forward looking statements, other important factors that could result in those differences include (a) general economic conditions in the telecommunications and Internet markets, including inflation, recession, interest rates, and other economic factors; (b) casualty to or other disruption of our facilities and operations; (c) those discussed in our Annual Report on Form 10K for the period ended July 31, 2001 and (d) other factors that generally affect the business of telecommunications, Internet and other communications companies. We assume no obligation to update these forward looking statements or to update the reasons actual results could differ materially from the results anticipated in the forward looking statements.
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Jul 05, 2002 |
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