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Wireless network to roll out nationwide

Embargoed until Friday, 10 March, 2000

Wireless network to roll out nationwide

CLEAR Communications today announced a major extension of its national telecommunications network using a wireless technology that will extend its business services well beyond the reach of its fibre-optic cables.

The company will employ Local Multipoint Distribution Services (LMDS) technology in a national rollout, starting by the middle of this year in Rotorua and the Auckland industrial suburb of Penrose.

Chief Executive Tim Cullinane said CLEAR will use its existing LMDS frequency block and a further block it has agreed to purchase from Denver-based Formus International, Inc.

LMDS is a fixed wireless technology that delivers data, video and voice services. Mr Cullinane said the technology will extend CLEAR's services to companies currently outside its existing national fibre-optic network. Importantly, CLEAR can now offer its entire range of online business telecommunications solutions at very competitive rates, without having to rely on Telecom to reach the customer.

"Wireless technologies such as LMDS are a key component of the three-stage network rollout we announced in January," said Mr Cullinane. "Funding for the $120 million first stage of the rollout has been confirmed by BT and we will have some further very exciting details of the LMDS plan to announce in coming months."

Formus bought its block of frequencies in the 26 GHZ range at auction in 1998 and has not yet launched broadband services. Vern Kenley, President of Formus International, said: "We are very committed to the LMDS technology and have a great affinity for New Zealand and this part of the world. However, we have been focussing our license acquisition and deployment efforts in Europe where we have licenses in five countries and nearly every other European country will issue LMDS licenses in the next nine - 12 months.

"At some point in time we would like to return here and help provide broadband services to this market".

CLEAR will now use its combined frequencies in the 28 GHZ and 26 GHZ ranges to provide the new service.

Mr Cullinane said CLEAR has been developing LMDS in conjunction with BT's development facilities in the UK for many months.

"LMDS provides cost-effective access to a huge group of business customers that until now we haven't been able to reach economically," he said. "It is a flexible technology that lets us deliver a wide range of services to the customer. It can also be rapidly installed with minimal disruption at the customer's site.

"It's important to note that LMDS currently provides an economic solution for business customers, not residential users. It certainly doesn't fix the underlying roadblocks to competition in the New Zealand market, which can be resolved only by local loop unbundling and genuine number portability. Those issues are being picked up by the current ministerial inquiry into telecommunications and it is the government's commitment to competition that gives us the confidence to invest in network expansions of this type."

"Our first LMDS customers will be online by July this year. The rollout will be nationwide but the first areas to go live will be Rotorua and Penrose. You can expect some further very exciting announcements about our rollout plans shortly."

Mr Cullinane said an equipment vendor will be selected in April.

ENDS

For further information contact Ross Inglis Public Affairs Manager CLEAR Communications Ph: (09) 912 4400 Office Ph: (021) 636 228 Mobile

Formus contact details:

Bernie Dvorak Chief Financial Officer Ph: +1 303 504 3223 Office

What is LMDS?

Local Multipoint Distribution Services (LMDS) is a broadband wireless communications system that delivers reliable digital two-way voice, data and Internet services. The term "Local" indicates that its signals operate in the local area. "Multipoint" means it is beamed out to a number of destinations, rather than earlier microwave technologies which operated point-to-point. "Distribution" means it delivers a wide range of telecommunications services.

While LMDS is technically and commercially significant, customers notice no difference in day-to-day use.

LMDS is rapidly emerging as a key access technology in the US, Canada, Asia, South America, Europe and Australia.

What are the advantages of LMDS?

For the customer, they are manifold. Because it is a multipoint technology, the costs of LMDS are shared over numerous customers and it is therefore a cost-effective access technology. That means LMDS will give a whole new band of businesses a choice of telecommunications supplier, and a wider range of data-intensive business solutions.

LMDS can also be rapidly installed with minimal disruption at the customer's site.

For CLEAR, LMDS offers the potential to bypass the existing monopoly-owned local loop and to serve a whole new bracket of business customers directly.

LMDS is also a broadband technology, which means CLEAR can deliver the entire range of its emerging portfolio of business telecommunications solutions, including the new breed of Internet-based services.

Does LMDS finally solve New Zealand's telecommunications competition issues?

For business customers in the areas served by CLEAR LMDS, the new technology will mean they have a choice of supplier for the first time. For the majority of telecommunications users, including virtually all residential users, there will still be only one supplier, however. Genuine competition across the board must await the outcomes of the ministerial inquiry into telecommunications.


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