Re Alliance
Bellsouth Corp
31 May 2001
BELLSOUTH AND STARMEDIA AGREE TO CREATE
FIRST MULTI-ACCESS PORTAL IN LATIN AMERICA
Strategic Alliance Between Leading Wireless and Internet Media Providers in
Latin America
ATLANTA - May 30, 2001 - BellSouth Corporation (NYSE: BLS) (www.bellsouth.com),
the dominant wireless communications company in Latin America operating in
eleven countries, and StarMedia Network, Inc. (NASDAQ: STRM)
(www.starmedia.com), the leading Internet media company targeting Spanish- and
Portuguese-speaking audiences, today announced a strategic alliance to create
the first multi-access portal (MAP) in Latin America. By combining StarMedia's
multi-access distribution platform and 35 million unique user base with
BellSouth's telecommunications infrastructure and 12 million customer base in
Latin America, the alliance is poised to capitalize on the region's rapidly
expanding wireless market, which is expected to grow from 65 million in 2000 to
221 million by 2005.* The MAP portals are expected to be launched over the next
six months in major markets throughout Latin America.
The joint effort between BellSouth and StarMedia will create groundbreaking
co-branded multi-access portals throughout Latin America that will enable the 12
million cellular customers of BellSouth's Latin America affiliates to access
personalized information from anywhere via their personal computers and cellular
phones. The mobile service will include WAP, SMS, text and voice access with
text to speech and voice recognition technology. The fully integrated portals
will also provide a premium content distribution and advertising platform for
marketers to reach their consumers.
Under the terms of the five-year strategic agreement, StarMedia will provide
multi-access portals, mobile applications, content, and application integration
to BellSouth's operating companies in Latin America. BellSouth will supply
wireless communications, marketing of services, and billing. The two companies
will share revenues generated by the new multi-access portals. As part of the
agreement, BellSouth will become StarMedia's preferred bandwidth, hosting and
network provider. The two companies will jointly promote the co-branded portal
through advertising and marketing.
In addition, BellSouth has purchased shares of a new series of StarMedia
convertible preferred stock at a common share equivalent price of $2.55 per
share for an aggregate purchase price of $25 million. On an as converted basis,
these shares represent an equity interest of approximately 11% in StarMedia.
BellSouth has also received warrants to purchase 4.5 million additional shares
of StarMedia common stock. The warrants may be exercised after 12 months and
are comprised of three tranches of 1.5 million shares each, priced at $4.55,
$6.55, and $8.55 per share, respectively.
'This alliance with StarMedia will allow us to move very quickly to provide our
wireless customers throughout Latin America with the most advanced Internet
portal in the region,' said Gary Forsee, Vice Chairman of BellSouth Corporation
and President of BellSouth International. 'StarMedia's combination of content,
technology and advertising relationships is a great fit with BellSouth Latin
America's access platforms, customer base and distribution system.'
'We've always believed that the wireless platform has the potential to be a
dominant means by which Latin Americans access the Internet, and we invested
early on to build the most comprehensive, competitive offering. By joining
forces with BellSouth, we are able to expand our initial investment with
significant capital, and to provide an additional leading-edge, pan-regional
distribution platform for our clients and users,' said Fernando Espuelas,
Chairman and CEO of StarMedia Network.
The co-branded, multi-access portal will enable wireless customers to access
comprehensive, localized information categories and to customize the portal so
they can retrieve select topics daily on their BellSouth cellular phone. The
portal will also feature community services and personalized tools such as chat,
e-mail and agenda, as well as advanced applications such as
phone-to-PC-calendars and content messaging.
Latin America is experiencing explosive growth in the wireless market. The
number of wireless subscribers in the region is expected to grow 28% per year,
compared to an estimated 16% growth per year worldwide, from 65 million in 2000
to 221 million in 2005.*
*Source: Jupiter Research, 9/00
About StarMedia Network, Inc.
StarMedia Network empowers and connects millions of Spanish- and
Portuguese-speakers through the Internet, enhancing the lives of its users.
StarMedia Network is the leading Internet media company in the Spanish- and
Portuguese-speaking world. The Company has operations in Argentina, Brazil,
Chile, Colombia, Mexico, Puerto Rico, Spain, Uruguay, Venezuela, and throughout
the United States.
About BellSouth Corporation
BellSouth Corporation is a Fortune 100 communications services company
headquartered in Atlanta, GA, serving more than 45 million customers in the
United States and 16 other countries, including Argentina, Brazil, Chile,
Colombia, Ecuador, Guatemala, Nicaragua, Panama, Peru, Uruguay and Venezuela.
Consistently recognized for customer satisfaction, BellSouth provides a full
array of broadband data and e-commerce solutions to business customers,
including Web hosting and other Internet services. In the residential market,
BellSouth offers DSL high-speed Internet access, advanced voice features and
other services. BellSouth also provides online and directory advertising
services, including BellSouth Real PagesSM.com
BellSouth owns 40 percent of Cingular Wireless, the nation's second largest
wireless company, which provides innovative wireless data and voice services.
In addition to historical information, this document contains forward-looking
statements regarding events and financial trends potentially affecting BellSouth
Corporation. BellSouth claims the protections of the 'safe harbor' provisions
of Private Securities Litigation Reform Act of 1995 with respect to such
forward-looking statements. Factors that could affect future results of
BellSouth and could cause actual results of BellSouth to differ materially from
those expressed or implied in the forward-looking statements include: (i) a
change in economic conditions in domestic or international markets where we
operate or have material investments which would affect demand for our services;
(ii) the intensity of competitive activity and its resulting impact on pricing
strategies and new product offerings; and (iii) higher than anticipated cash
requirements for investments, new business initiatives and acquisitions. The
forward-looking information in this document is given as of this date only, and
BellSouth assumes no duty to update this information.
This press release contains statements of a forward-looking nature within the
meaning of the 'safe harbor' provisions of the Private Securities Litigation
Reform Act of 1995 relating to future events or future financial results of
StarMedia Network, Inc. Investors are cautioned that such statements are only
predictions and are based on management's current expectations or beliefs and
are subject to a number of factors that could cause actual events or results to
differ materially. In considering such statements, investors should specifically
consider various factors which could cause actual events or results to differ
materially from those indicated from such forward-looking statements, including
the matters set forth in StarMedia Network, Inc.'s reports and documents filed
from time to time with the Securities and Exchange Commission.
Press Inquiries:
Jeff Battcher
BellSouth Corporation
Jeff.Battcher@bellsouth.com
(404) 713.0274
Brooke Harlow
StarMedia Network, Inc.
Brooke.Harlow@starmedia.net
(212) 905-8368
Investor Inquiries:
Amy Carpi
StarMedia Network, Inc.
Amy.Carpi@starmedia.net
(212) 905.8318