Proposed Acquisition of Telco Systems

BATM Advanced Communications Ld
3 February 2000



A presentation to analysts will be
held at 10.00am today in the Trust Boardroom,
Dresdner Kleinwort Benson, 20 Fenchurch Street


           BATM ADVANCED COMMUNICATIONS LIMITED
                             
           PROPOSED ACQUISITION OF TELCO SYSTEMS
                             
- BATM  announces that it has conditionally  agreed  to
  acquire Telco Systems, a major US manufacturer of network
  transport and access systems for leading telecommunication
  companies, from World Access Inc. for a total consideration
  of US$326.6 million (£203.5 million).

- US$200  million (£125 million) of this  consideration
  will  be  paid  in cash from existing resources,  US$65.8
  million (£41.0 million) will be satisfied by the issue of
  960,000 New Ordinary Shares to World Access Inc. and  the
  balance  of  US$60.8  million  (£37.9  million)  will  be
  satisfied  by a placing of New Ordinary Shares for  cash.
  Dresdner Kleinwort Benson has acted as adviser to BATM.

- Strong strategic fit
  -    BATM has a pipeline of new IP products aimed at telcos
  -    explosive internet growth is moving telcos from
       circuit to packet (IP) equipment
  -    Telco Systems is strong in sales, distribution and
       technical support to US telcos
  -    Telco Systems has a broad high quality customer base
  -    the transaction expands and strengthens BATM's product
       range
  -    the technology is complementary
  -    the Acquisition brings experienced US management who
       will be retained by BATM

- World Access Inc. will enter into a letter of intent
  to purchase a range of BATM's products following completion
  of the proposed acquisition

- Due to its size, the Acquisition is conditional on the
  approval of BATM shareholders. It is also conditional on US
  anti-trust clearances.
  
  Dr  Zvi  Marom, BATM's Chief Executive today said 'BATM's                   
  acquisition  of  Telco Systems represents  a  significant                   
  opportunity  for us to establish a stronger  presence  in                   
  the   US  telecommunications  equipment  markets.   Telco                   
  Systems  innovative EdgeLink multiplexer series naturally                   
  complements  BATM's switching and access  solutions  that                   
  cater  to  the  network  edge. On a  combined  basis,  we                   
  anticipate  that  our  bundled  service  offerings   will                   
  become  a  compelling  sales  tool.  Furthermore,   Telco                   
  Systems' direct salesforce and well developed direct  and                   
  indirect  sales  channels establish  a  broad  sales  and                   
  marketing   presence   for   BATM,   especially   in   US                   
  telecommunications  equipment  market.   We   intend   to                   
  utilize   Telco   Systems'   customer   development   and                   
  retention programs as a basis for further retail  account                   
  growth.'                                                                    
 
  This  summary should be read in conjunction with the full
  text  of  the following announcement issued on behalf  of
  BATM by Dresdner Kleinwort Benson.


Enquiries:

www.batm.com


BATM                                     00972 3 938 6888                     
Dr Zvi Marom  (Chief Executive)                                           
Ofer Bar-Ner  (Finance Director)                                          
                                                                              
Dresdner Kleinwort Benson                   0207 623 8000                     
Mark Smith                                                                    
                                                                              
Shore Capital and Corporate Limited         0207 408 4090                     
Graham Shore    
                                       
Ludgate Communications                      0207 253 2252
Edward Macquisten         
                          
Kleinwort Benson Limited ('Dresdner Kleinwort Benson'),
which is regulated in the UK by The Securities and Futures
Authority Limited, is acting exclusively for BATM in
connection with the acquisition and no-one else and will
not be responsible to anyone other than BATM for providing
the protections afforded to customers of Dresdner Kleinwort
Benson, or for giving advice in relation to the
acquisition.

Shore Capital and Corporate Limited ('Shore Capital') which
is regulated in the UK by The Securities and Futures
Authority Limited, is acting exclusively for BATM in
connection with the acquisition and no-one else and will
not be responsible to anyone other than BATM for providing
the protections afforded to customers of Shore Capital, or
for giving advice in relation to the acquisition.



                             
           BATM ADVANCED COMMUNICATIONS LIMITED
                             
           PROPOSED ACQUISITION OF TELCO SYSTEMS
                             
Introduction
BATM  announces that it has conditionally agreed to acquire
Telco   Systems,  a  leading  US  manufacturer  of  network
transport  and access systems for leading telecommunication
companies  from  World Access Inc. The total  consideration
amounts  to  US$326.6  million  (£203.5  million).   US$200
million  (£125 million) of this consideration will be  paid
in  cash  from  existing resources, US$65.8 million  (£41.0
million)  will  be satisfied by the issue  of  960,000  New
Ordinary Shares to be retained by World Access Inc. and the
balance   of  US$60.8  million  (£37.9  million)  will   be
satisfied  from a placing of New Ordinary Shares  for  cash
described  below.   Dresdner  Kleinwort  Benson  has  fully
underwritten this placing.

In  view  of  its  size, the Acquisition is conditional  on
Shareholder  approval. It is also conditional, inter  alia,
on US regulatory clearance.


Background to and reasons for the Acquisition
Over  the  last  two  years  BATM  has  developed  internet
protocol    (IP)    based    products    aimed    at    the
telecommunications and datacommunications  markets.   These
products  have  advanced  rapidly  in  their  technological
capabilities. The Titan T4 and T5 switches have reached the
market  and  the  non-blocking Titan T6 switch  remains  on
course   for  Beta  trials  to  commence  in  April   2000.
Additionally, the Company has recently announced the launch
of  the  Titan  T5  QS switch, incorporating  some  of  the
quality  of service features which will be present  in  the
Titan  T6  as  well  as  plans  to  demonstrate  a  working
prototype of the system containing the crossbar from the Titan 
T8 photonic switch at Cebit in February 2000.

BATM has a stated strategy not only to attain technological
excellence but also to increase penetration of its products
in the packet-based networking, telecommunications and data
communications  markets.  The major  customers  for  BATM's
products   are  telecommunications  and  datacommunications
equipment manufacturers many of whom are based in  the  US.
BATM  has  also  stated  its aim of acquiring  a  US  based
business to further this strategy.

Telco  Systems is a leading US manufacturer of fibre optic,
digital transmission equipment and network access products.
Telco Systems is currently owned by World Access Inc, a  US
quoted   provider  of  bundled  voice,  data  and  internet
services.   Telco Systems has been involved  in  delivering
voice and data solutions for service providers for over  20
years,  manufacturing  network  access  servers,  bandwidth
optimisation products, broadband transmission equipment and
frame  relay access devices enabling LAN and WAN networking
across frame relay networks.

Telco Systems' product range is aimed at the point at which
networks  interconnect and its core technology  focuses  on
multiplexing  of  circuit, packet and cell-based  networks.
As  such  its products are highly complementary  to  BATM's
switches  and switch routers which connect to  such  access
devices.   The EdgeLink family from Telco Systems  delivers
service  providers  a  wide range of  solutions,  including
SONET/SDH access,   T3  multiplexing   and   seamless
migration from circuit-switched to emerging packet and cell
technologies.   Products are manufactured  for  IXC,  ILEC,
CLEC,  RBOCs, PTT and Utility service providers around  the
globe including, in North America, Europe and Asia.  World 
Access Inc. will enter into a letter of intent to purchase 
a range of BATM's products following completion of the 
proposed Acquisition.

Key attractions of Telco Systems to BATM include:

- Existing and new products aimed at growth markets

  Growth  in internet usage has led to greater demands  for
  infrastructure.  In  addition, convergence  of  internet,
  data,  voice  and  video  technologies  will  drive   the
  requirement  for  bandwidth and greater  demands  on  the
  capabilities  of customer access devices.  The  directors
  of  BATM  believe  that the markets  for  Telco  Systems'
  equipment  are  growing  rapidly.  Independent  estimates
  show  these  markets  growing from US$3.0bn  in  1998  to
  US$6.0bn in 2001.
  
  The   EdgeLink  family  provides  a  range  of  solutions
  offering  cost effective integration of voice,  data  and
  internet access over a single, high speed link and  other
  IP-based  functionality over fibre  and  other  networks.
  The  range  also offers associated multiplexing solutions
  for  high bandwidth applications. Existing users  of  the
  EdgeLink  family  of products include  Cisco  and  Nortel
  with  potential  OEM  relationships  with  Lucent.    The
  integrated  access market is served by the  Access  range
  of  products  being high capacity multiplexers  providing
  digital   access   to   public  and   private   networks.
  Customers using Access products include BT and Concert.

  Telco  Systems'  products supply three principal  markets
  being  multi service access, the multi service  broadband
  transport  and  access concentration, and  the  integrated
  access markets.

- Broad customer base and distribution

  Telco  Systems'  ultimate customers are  network  service
  providers,  including CLECs, RBOCs, LECs, IXCs,  wireless
  service   providers,   international   PTTs,   ISPs   and
  utilities  offering  competitive   telephone  services  
  over  their  rights  of  way.   Large  service  provider  
  customers include Bell Atlantic, AT&T,  Sprint,
  MCI  WorldCom,  British  Telecom,  Ameritech,  BellSouth,
  Nextlink  and  Concert.  Telco  Systems  also  sells  its
  products  to  leading  equipment  manufacturers  such  as
  Cisco,  Lucent/Ascend, Nortel and PairGain. Telco Systems
  services  its  customers through  its  own  direct  sales
  force    as   well   as   through   leading   third-party
  distributors.
  
  BATM  intends  to  achieve  greater  penetration  of  its
  product  range through the utilisation of Telco  System's
  existing   client  base  in  order  to  provide   broader
  distribution channels.
  

- Experienced management team to be retained by BATM
  
  Telco  Systems  has  a strong and experienced  management
  team  which has the depth of knowledge and experience  to
  build  upon  the  established development  programmes  in
  North  America. David LeBeau, President of Telco Systems,
  will  report directly to BATM's Chief Executive,  Dr  Zvi
  Marom.
  
   Name        Position         Age    Industry     Years at
                                       Experience   Telco
                                                    Systems

   David A.    President         39       18           5
   LeBeau      Telco Systems
               Systems Division

   Clinton W.  Vice              39       16           5
   Clements    President
               Global Sales

   Daniel A.   Vice              44       14           2
   Bettencourt President
               Operations
  
   Charles S.  Vice              40       19           2
   Macdonough  President
               Customer Support
               and Quality
               Assurance
  
   John        Vice President    40       18           *
   Rokosz      Engineering 
  
   David J.    Controller        46       11          11
   Garrity

   *Recent recruit


  All   of   the  above  have  entered  into  new   service
  agreements   with   BATM,  subject  to  the   Acquisition
  becoming unconditional.

- Complementary technology

  Telco  Systems' multi-service EdgeLink100 and EdgeLink300
  are  market  leading  technological  developments,  which
  complement  BATM's  opto-electronic and  photonic  switch
  product  lines.  Such complementary product  ranges  will
  provide  significant opportunities for cross  selling  to
  existing  customers  and technology transfers  which  are
  expected  to advance the market position of the  enlarged
  group.

  Telco  Systems EdgeLink products have shown strong  sales
  growth,  fuelled  by  rising requirements  for  bandwidth
  which  is  being  fulfilled through deployment  of  Telco
  Systems  equipment by service providers including  CLECs,
  utilities  and  incumbent  service  providers.  The   new
  EdgeLink  family  offers service providers  an  economic,
  scalable  architecture to migrate  from  circuit  to  IP-
  based  packet  architectures. BATM's  expertise  in  high
  performance  opto-electronic and  photonic  switches  for
  LAN  to  WAN  (edge) applications and its  joint  venture
  with  3M  in  respect  of commercialising  desktop  fibre
  optic  cabling  will  be of significant  value  to  Telco
  Systems.  Telco Systems has a reputation for setting  new
  industry  standards  for  integrated  access  devices  in
  terms  of  cost,  size,  port  density,  scalability  and
  services supported.


Further information on Telco Systems
In  the  year ended 31 August 1998, Telco Systems  reported
turnover  of  US$113.2 million (£70.5 million)  and  profit
before  interest,  tax and exceptional charges  of  US$1.46
million  (£0.91 million). Net assets as at 31  August  1998
were   US$55.5  million  (£34.6  million).  Following   its
acquisition  by  World  Access  Inc,  which  completed   in
November 1998, Telco Systems changed its accounting  period
to  31  December. In the nine months to 30 September  1999,
Telco   Systems  (excluding contributions from the wireless 
business not being acquired by BATM) reported  unaudited  
turnover  of  US$91.8 million (£57.2 million) and profit 
before interest and  tax of  US$20.5 million (£12.8 million). 
In addition,  according to unaudited  management accounts, 
Telco Systems  recorded strong sales in the fourth quarter 
of 1999.

The  above  figures  are stated under  US  GAAP  and  Telco
System's  accounting policies. Application of UK  GAAP  and
BATM's  own accounting policies will result in a  different
treatment of items including revenue recognition,  research
and   development  expenditure,  one-off  profit  and  loss
credits and other treatment of reserves resulting in  lower
turnover  and  materially lower profit before interest  and
tax.  The  audited figures for the year ended  31  December
1999 for Telco Systems will be included in the circular  to
be sent to BATM's shareholders as described below.


Terms of the Acquisition
Under  the  terms of the Acquisition Agreement,  BATM  will
acquire Telco Systems for a total consideration of US$326.6
million  (£203.5  million), of which US$200  million  (£125
million)  will  be  paid in cash from  existing  resources,
which  include  the  net proceeds of  the  share  placement
concluded in November 1999. US$65.8 million (£41.0 million)
of  the consideration will be satisfied by the issue of  up
to  960,000  New  Ordinary Shares to World Access  and  the
balance  of US$60.8 million (£37.9 million) from a  placing
of New Ordinary Shares for cash.

The  960,000  New Ordinary Shares to be retained  by  World
Access  will  comprise approximately 2.7 per cent.  of  the
issued  share  capital of the Enlarged Group. World  Access
has  agreed that they will not dispose of any of  the  New
Ordinary Shares to which they become entitled for a  period
of 12 months following Completion.

BATM will raise approximately US$80m by way of an issue  of
New  Ordinary Shares for cash to satisfy the balance of the
consideration  for the Acquisition and provide  flexibility
for  future bolt-on acquisitions. Dresdner Kleinwort Benson
will  act  as sole bookrunner to the equity issue and  both
the  issue price and number of shares to be issued will  be
determined   upon   completion  of  such  issue.   Dresdner
Kleinwort Benson reserves the right to open the book at any
time.   However, it is unlikely that the equity  issue  will
take  place  prior  to  the despatch  of  the  circular  to
shareholders seeking approval for the Acquisition.

Dresdner   Kleinwort  Benson  has  also  underwritten   the
proceeds of the equity issue. Application will be made  for
admission  of the new ordinary shares to the Official  List
of the London Stock Exchange.

The  Acquisition is conditional upon obtaining the approval
of  BATM shareholders, which approval will be sought at  an
extraordinary general meeting. It is also conditional on US
anti-trust  clearances.  The placing  is  conditional  upon
completion of the Acquisition.


Current trading and prospects
Since  30  June 1999 BATM has continued to build sales  and
has  substantial orders in hand for the year 2000.  Trading
is  in  line with the directors' expectations. BATM expects
to announce its results for the year ended 31 December 1999
in early March 2000.

As  stated  above  Telco  Systems, according  to  unaudited
management   accounts,   has   recorded    strong    sales,
particularly  to the main distributors of its  products  in
the  last  quarter of 1999. These distributors are expected
by  the  directors  of BATM to maintain strong  demand  for
Telco  Systems' products in 2000. Accordingly the directors
of BATM view Telco System's prospects with confidence.

The strategic fit of Telco Systems with BATM encourages the
BATM  directors  to  believe  that  there  are  significant
opportunities for revenue growth, not only from BATM's  and
Telco System's strong respective market positions, but also
from  synergies to be obtained from combining  BATM's  core
proprietary  technologies with Telco System's  current  and
future products through enhanced distribution channels.  On
a  combined basis therefore, the directors of BATM  believe
BATM and Telco Systems have a positive future.


General
A  circular to Shareholders, containing further details  of
the  transaction  and  convening an  extraordinary  general
meeting, will be posted as soon as is practicable.

Sterling equivalents of amounts stated in US Dollars  (US$)
have  been provided throughout this press release using  an
exchange  rate of £1 to US$1.605, the spot rate  ruling  at
the  close of business in London on 2nd February, 2000 (the
latest  practicable date prior to the publication  of  this
press release).


Enquiries:

www.batm.com

BATM                                  00972 3 938 6888
Dr Zvi Marom (Chief Executive)              
Ofer Bar-Ner (Finance Director)              

                                         
Dresdner Kleinwort Benson                0207 623 8000
Mark Smith                               
                                         
Shore Capital and Corporate Limited      0207 408 4090
Graham Shore                             
                                         
Ludgate Communications                   0207 253 2252
Edward Macquisten          
                           

Kleinwort  Benson  Limited ('Dresdner  Kleinwort  Benson'),
which  is regulated in the UK by The Securities and Futures
Authority  Limited,  is  acting  exclusively  for  BATM  in
connection  with the acquisition and no-one else  and  will
not  be responsible to anyone other than BATM for providing
the protections afforded to customers of Dresdner Kleinwort
Benson,   or   for  giving  advice  in  relation   to   the
acquisition.

Shore Capital and Corporate Limited ('Shore Capital') which
is  regulated  in  the  UK  by The Securities  and  Futures
Authority  Limited,  is  acting  exclusively  for  BATM  in
connection  with the acquisition and no-one else  and  will
not  be responsible to anyone other than BATM for providing
the protections afforded to customers of Shore Capital,  or
for giving advice in relation to the acquisition.