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Teleglobe plans $5B network
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May 10, 1999: 8:47 a.m. ET
Fiber-optic expansion to combine voice, data and Internet connections
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NEW YORK (CNNfn) - Montreal-based Teleglobe Inc. said Monday it will invest $5 billion to expand its telecommunications network in 160 markets worldwide.
The new fiber-optic system, called GlobeSystem, will combine voice, Internet, data and video networks through a single network, Teleglobe (TGO) officials said. The company said it's developing the system with Nortel Networks (NT), among others.
In an interview with CNNfn's "Business Day," company officials said the five-year venture was designed to thrust Teleglobe into the forefront of the global telecommunications market. The integrated network is based on the concept of communications "convergence."
"It's a large bet on data," said Charles Sirois, chairman and chief executive officer of Teleglobe Inc., the parent company of Reston, Va.-based Teleglobe Communications Corp. "Just to support our growth, we need to make that very large investment."
The company said the first phase of the project already is under way, as the company quadruples its current network capacity and expands its reach in the northeast United States, Canada and Europe. In the second phase, Teleglobe will set up a transatlantic fiber-optic network system and will expand into the Asia Pacific region.
The company's stock has been trading in the range of 28 to 29 in recent days, far off its 52-week high of 40-15/16. While the expenses of the venture are expected to cut into Teleglobe's profits for the first two years, Sirois said the investment is positioning the company for future growth.
"It's a very sound investment and we will demonstrate that to Wall Street," he said.
Teleglobe's other major unit is Excel Communications, which serves international retail customers. The company also is the fourth largest long distance provider in the United States. 
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Teleglobe
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