Under the agreement, KDD will issue 4,011,800 new shares, or approximately 5% of its enlarged share capital, to SingTel. At the same time, SingTel will issue to KDD 221,310,898 new shares, representing 1.43% of the enlarged SingTel share capital. The pricing of the share swap was arrived at following negotiations on a willing buyer and a willing seller basis.

Formation of joint venture

In conjunction with the partnership, KDD and SingTel have signed an Agreement-In-Principle with the intent to form an equally-owned joint venture (JV) that will provide premium seamless and managed end-to-end telecommunications services to multinational corporations and business customers. These services include Asynchronous Transfer Mode (ATM), frame relay, international leased circuits and services based on Internet Protocol.
Although KDD and SingTel presently have their own networks in the Asia Pacific, the two companies intend for the JV to provide services on a common platform. To meet this objective, the JV will develop an integrated ATM backbone in the Asia Pacific region with connectivity to North America and Europe. The backbone's initial nodes will be located in Singapore, Tokyo and Hong Kong.

KDD and SingTel will contribute assets such as submarine cables and equipment as well as second personnel to the JV. Ownership of the ATM backbone will provide the JV with operational flexibility and enable it to better manage its cost structure so that it can offer services that are competitively priced. Total amount of investment of the JV over the five years will be in the region of US$350 million.

Presently, KDD and SingTel work with other carriers to provide global service to their customers. Where necessary, the JV will do likewise to distribute its services. It will provide comprehensive back office support including consolidated billing, clearing house, product development and network management functions. Customers will have a single point of contact and a single contract with the JV. The services provided by the JV will be useful to other carriers who are keen to serve their customers with managed end-to-end services.

KDD and SingTel expect to sign a definitive agreement on the JV by end of February 2000 with the incorporation of the JV scheduled for April 2000.

Strengthening of a partnership

KDD President, Mr. Tadashi Nishimoto, said: "The new equity relationship between SingTel and KDD is definitely a new step in our long-standing and tested partnership that will enable solid expansion of our business especially in the Asian region. The two of us standing shoulder to shoulder will remodel the Asian telecommunications market."

"The true purpose of our alliance and our agreement to establish a joint venture," said Mr. Nishimoto, "is for the customers to benefit from abundant opportunities to enjoy premium quality, seamless end-to-end managed products and services based on an integrated ATM backbone. It is my strong belief that SingTel and KDD will continue to be the leaders in the Asian region in the new millennium."

SingTel President and CEO, Brigadier General Lee Hsien Yang, said: "SingTel is pleased to welcome KDD, an established and well-regarded telecommunications company, as a strategic partner. The share swap reflects the strong and significant commitment of KDD and SingTel to the partnership and cements the already close relationship of our two companies.

"KDD and SingTel have had a long history of working together. We were founder members of the WorldPartners alliance and we have also collaborated closely in the planning of many submarine cable systems in the region. This strengthening of our partnership will ensure that both companies continue to play leading roles in the region even as the telecommunications industry continues to consolidate."

About KDD Corp

KDD, a leading telecommunications company in Japan, provides a comprehensive range of voice, data and video products and services to both business customers and consumers with more than 45 years of operation.
The KDD Group consists of 71 companies covering a wide variety of telecommunication related businesses such as engineering, facility hosting and submarine cable construction. It has 74 offices in Japan and 35 abroad providing customers with global support.
Operating revenue and income of fiscal year ended March 1999 of the Group were 405 billion yen and 6 billion yen respectively.

About Singapore Telecom

Singapore Telecom is a world-class provider of domestic, international and mobile telecommunications as well as postal services. Turnover and net profit for the Group in 1998/99 were S$4.88 billion and S$1.96 billion respectively. Publicly listed in October 1993, Singapore Telecom is Singapore's largest company in terms of market capitalisation.
The Singapore Telecom Group has invested more than S$2.5 billion in telecommunications-related projects around the world, especially in the Asia Pacific. It owns interests in 54 ventures and operations in 19 countries including the Philippines, Thailand and Belgium. It has representative offices in 18 cities in Asia, North America and Europe.