Williams, Telmex Sign Strategic Alliance

Thursday, May 27, 1999

Oklahoma-based Williams Communications Group, a unit of Williams (NYSE: WMB), and Mexican telecommunications company Telmex (NYSE: TMX) have entered into a non- exclusive strategic alliance to enhance their international telecommunications services between Mexico and the United States. Williams and Telmex will interconnect their long distance fiber-optic networks to jointly develop seamless voice, data and video transport services to serve their respective markets. The opportunities under the agreement will expand as further relaxation of existing regulatory requirements by United States and Mexican regulatory authorities occurs. Simultaneously with the initial public offering of Williams Communications, Telmex will acquire up to US$100mn of its stock, to finance further Williams network expansion. Both the stock purchase agreement and the agreement to provide services are subject to certain closing conditions, including normal regulatory approval for the stock purchase. "This deal supports Williams' global strategy by extending our geographic reach throughout Telmex's markets enabling us to offer high-quality, cost competitive wholesale transport to our clients seeking to enter Latin America," said Howard Janzen, president and CEO of Williams Communications Group. Williams Communications' nationwide fiber-optic network has 17,600 route miles in service, 20,000 miles of fiber in the ground and plans to complete 32,000 route miles connecting 125 cities by the end of 2000. Telmex has more than 10 million access lines and 2.5 million wireless customers, served through its all-digital fiber-optic 20,000 miles network, as well as investments in telecommunications business in three countries.

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