iBasis (NASDAQ: IBAS), a KPN affiliate, and TDC, the leading
telecommunications company in Denmark, today announced that the
companies have reached an agreement that will make iBasis the
exclusive provider of international voice services for TDC for a
five-year period. iBasis will pay TDC approximately $10 million in
cash, while the outsourcing arrangement is expected to generate
approximately $80 million in new annual revenue for iBasis. TDC will
become a preferred partner for terminating iBasis traffic into the
Nordic region. Other financial details of the agreement are
undisclosed.
The outsourcing arrangement closely follows iBasis´ transaction
with Royal KPN, N.V. in October 2007, which resulted in the
acquisition of KPN Global Carrier Services by iBasis, effectively
outsourcing KPN´s international voice business to iBasis. Combining
KPN Global Carrier Services with iBasis has enabled iBasis to become a
leading platform for international voice outsourcing by giving the
company far greater scale, advanced features for mobile traffic, and a
more complete premium quality product portfolio.
Upon completion of the agreement, which is pending consent from
competition authorities, iBasis will acquire the voice-related assets,
contracts, office rental and employees of TDC subsidiary TDC Carrier
Services U.S., which will be fully integrated into iBasis.
Approximately 130 non-Nordic international wholesale voice customers,
as well as all of TDC´s interconnection and bilateral agreements for
inbound and outbound international phone calls will be transferred to
iBasis. TDC will maintain its Nordic customer base and its pan-Nordic
reach, and will benefit from becoming iBasis´ preferred partner for
termination of international traffic throughout the Nordic region.
The agreement affects approximately two billion international
voice minutes annually including captive outbound traffic from TDC´s
retail services to non-Nordic destinations and inbound and transit
traffic from non-Nordic countries. According to Telegeography 2007,
approximately eight billion minutes of international voice traffic
flow in and out of the Nordic region annually.
Intense competition in telecommunications is driving carriers
worldwide to focus their resources on the implementation of innovative
technologies and the development of compelling services that are
highly valued by their consumer customers. TDC continues to invest
massively in IT and fixed and mobile network technologies to deliver
the highest quality TV, telephony, and broadband services in Denmark
and through its subsidiaries in other Nordic countries. The
convergence of network technologies and services provides TDC exciting
market opportunities and requires increased focused on the development
of consumer and business services.
"TDC has always been committed to delivering the highest quality
of service for our fixed and mobile customers. The most efficient way
for us to continue to provide reliable, high quality international
voice services while addressing innovative technology initiatives such
as fixed/mobile convergence is to establish a strategic partnership
with a wholesale partner that specializes in outsourcing international
voice services," said Ole Hvelplund, COO, TDC Wholesale. "We selected
iBasis as the most qualified carrier, due to its focus on
international voice, its expertise in IP, and particularly its
combination with KPN Global Carrier Services."
"Carriers are increasingly recognizing that they can focus more
effectively on meeting the challenges and opportunities of their core
retail business by outsourcing the commoditized international voice
business to specialized wholesale providers like iBasis," said Ofer
Gneezy, president and CEO of iBasis. "Unlike most wholesale providers,
international voice is our core business, and because of the
efficiencies of scale we´re able to leverage, iBasis is uniquely
positioned to be the outsource solution for incumbent carriers like
TDC."
The agreement, which is subject to the approval of relevant
competition authorities, is expected to close in Q1 2008. Until the
agreement is officially completed, the companies will continue to
conduct business independently.
About TDC
With nearly eight million customers, TDC is the leading provider
of communications solutions in Denmark and a strong player in the
Nordic business market. The company has evolved from a traditional
provider of landline and mobile services into a dynamic provider of
modern communications solutions. In all key markets in Denmark, TDC
will continue to be the clear front-runner, and it is TDC´s goal to be
the most efficient telecom operator in the Nordic region, providing
the best coherent services on all terminals and networks, anytime,
anywhere. The company´s shares are traded on the Copenhagen Stock
Exchange.
About iBasis
Founded in 1996, iBasis (NASDAQ: IBAS) is a leading wholesale
carrier of international long distance telephone calls and a provider
of retail prepaid calling services and enhanced services for mobile
operators. iBasis customers include KPN, KPN Mobile, E-plus, BASE, and
many other large telecommunications carriers such as AT&
