Deutsche Telekom Forces TelDaFax AG to Declare Insolvency

German Incumbent Denies World Access' Attempts

To Solve TelDaFax Liquidity Shortfall



Apr 02, 2001, 01:00 ET from World Access, Inc.

    ATLANTA, April 2 /PRNewswire/ -- World Access, Inc. (Nasdaq:   WAXS)
 confirmed today that its German subsidiary, TelDaFax AG (Neuer Markt: TFX),
 was forced to file for insolvency in an attempt to avoid the cancellation of
 services from its largest supplier, Deutsche Telekom AG ("DTAG").  World
 Access owns approximately 70% of the shares of TelDaFax following the closing
 of its tender offer earlier today.
     Deutsche Telekom had threatened to discontinue services to TelDaFax today,
 unless TelDaFax could confirm in writing its ability to meet a scheduled
 repayment of its obligations to Deutsche Telekom.  TelDaFax could not provide
 such confirmation without a formal funding commitment from World Access.
 World Access had advised Deutsche Telekom that its Board of Directors was
 scheduled to meet this week to approve a funding plan for TelDaFax, and had
 requested that the deadline be extended until Friday, April 6.  World Access
 was prepared to pre-pay for TelDaFax services until such deadline, thereby
 removing any credit risk associated with Deutsche Telekom granting the
 requested extension.
     World Access Chairman and Chief Executive, John D. Phillips, spoke with
 Deutsche Telekom during the weekend in order to advise them of World Access'
 intent and ability to fund TelDaFax.  World Access is continuing discussions
 with DTAG representatives in order to avoid the discontinuation of services to
 TelDaFax, which would enable World Access to pull TelDaFax out of insolvency
 proceedings.
     "This is an apparent example of Deutsche Telekom's desire to take any
 measures required to restore its monopoly position in the German market," Mr.
 Phillips said.  "There was absolutely no risk involved in DTAG extending the
 deadline, as we were willing to pre-pay on TelDaFax's behalf.   This would
 have allowed our Board the opportunity to evaluate the complete funding
 requirements of TelDaFax.  It appears to be more than a coincidence that DTAG
 threatened to shut down TelDaFax on the very day that the acquisition of a
 majority interest in TelDaFax by a U.S. firm was consummated.  This seems to
 lend credibility to the concerns of U.S. regulators and certain members of
 Congress regarding the possible entry into the US market by DTAG, a majority
 of whose shares are owned by the German government.
     "This further evidences a potential failure of deregulation in the German
 market, where DTAG has practiced predatory pricing tactics, at the expense of
 its own financial results, in order to maintain market share.  In addition,
 DTAG has succeeded in getting the regulatory approval of charges to other
 service providers for billing and collection services that appear to be
 significantly outside the bounds of commercially reasonable terms.  DTAG also
 continues to charge other service providers for interconnection ports on an
 annual pre-payment basis, which is also not normal commercial practice."
     A receiver has been appointed by the German courts to evaluate the
 financial position of TelDaFax in an effort to organize a restructuring of its
 obligations.
 
     About World Access
     World Access is focused on being a leading provider of bundled voice, data
 and Internet services to small- to medium-sized business customers located
 throughout Europe.  In order to accelerate its progress toward a leadership
 position in Europe, World Access is acting as a consolidator for the highly
 fragmented retail telecom services market, with the objective of amassing a
 substantial and fully integrated business customer base.  To date, the Company
 has acquired several strategic assets, including Facilicom International,
 which operates a Pan-European long distance network and carries traffic for
 carrier customers, NETnet, with retail sales operations in 9 European
 countries, and WorldxChange, with retail accounts in the US and Europe.  World
 Access, branding as NETnet, offers services throughout Europe, including long
 distance, internet access and mobile services.  The Company provides end-to-
 end international communication services over an advanced asynchronous
 transfer mode internal network that includes gateway and tandem switches, an
 extensive fiber network encompassing tens of millions of circuit miles and
 satellite facilities.  For additional information regarding World Access,
 please refer to the Company's website at www.waxs.com .
     This press release may contain financial projections or other forward-
 looking statements made pursuant to the safe harbor provisions of the
 Securities Reform Act of 1995.  Such statements involve risks and
 uncertainties which may cause actual results to differ materially.  These
 risks include: inability to obtain adequate financing or financing on terms
 acceptable or favorable to the Company; inability to restructure existing debt
 obligations; potential inability to identify, complete and integrate
 acquisitions; difficulties in expanding into new business activities; delays
 in new service offerings; the potential termination of certain service
 agreements or the inability to enter into additional service agreements; and
 other risks described in the Company's SEC filings, including the Company's
 Annual Report on Form 10-K for the year ended December 31, 1999, as amended,
 the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
 2000 and June 30, 2000, as amended, the Company's Quarterly Report on Form
 10-Q for the quarter ended September 30, 2000, and the Company's Registration
 Statements on Forms S-3  (No. 333-79097) and S-4 (No. 333-37750 and 333-
 44864), and the Company's Report on Form 8-K dated February 21, 2001, all of
 which risks are incorporated by reference into this press release.
     World Access has filed a proxy statement/prospectus and other relevant
 documents concerning the TelDaFax transactions with the SEC.  WE URGE
 INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
 DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
     Investors will be able to obtain the documents free of charge at the SEC's
 Web site, www.sec.gov.  In addition, documents filed with the SEC by World
 Access will be available free of charge by writing to Investor Relations,
 World Access, Inc., 945 E. Paces Ferry Road, Suite 2200, Atlanta, GA, 30326,
 or by telephone request to 404-231-2025.
      The participants, as defined in Instruction 3 to Item 4 of Schedule 14(A)
 in the solicitation of proxies from the World Access stockholders for the
 approval of the transactions include World Access and Walter J. Burmeister,
 Kirby J. Campbell, Brian Cipoletti, Stephen J. Clearman, John P. Imlay, Jr.,
 Massimo Prelz Oltramonti, John D. Phillips, John P. Rigas, Carl E. Sanders and
 Lawrence C. Tucker, each a director of World Access.  Please see World Access'
 Registration Statement on Form S-4 (No. 333-44864) for a description of the
 World Access security holdings of each of the World Access directors.
 
     CONTACT:  Investor Relations of World Access, Inc., 404-231-2025
 
 

SOURCE World Access, Inc.
    ATLANTA, April 2 /PRNewswire/ -- World Access, Inc. (Nasdaq:   WAXS)
 confirmed today that its German subsidiary, TelDaFax AG (Neuer Markt: TFX),
 was forced to file for insolvency in an attempt to avoid the cancellation of
 services from its largest supplier, Deutsche Telekom AG ("DTAG").  World
 Access owns approximately 70% of the shares of TelDaFax following the closing
 of its tender offer earlier today.
     Deutsche Telekom had threatened to discontinue services to TelDaFax today,
 unless TelDaFax could confirm in writing its ability to meet a scheduled
 repayment of its obligations to Deutsche Telekom.  TelDaFax could not provide
 such confirmation without a formal funding commitment from World Access.
 World Access had advised Deutsche Telekom that its Board of Directors was
 scheduled to meet this week to approve a funding plan for TelDaFax, and had
 requested that the deadline be extended until Friday, April 6.  World Access
 was prepared to pre-pay for TelDaFax services until such deadline, thereby
 removing any credit risk associated with Deutsche Telekom granting the
 requested extension.
     World Access Chairman and Chief Executive, John D. Phillips, spoke with
 Deutsche Telekom during the weekend in order to advise them of World Access'
 intent and ability to fund TelDaFax.  World Access is continuing discussions
 with DTAG representatives in order to avoid the discontinuation of services to
 TelDaFax, which would enable World Access to pull TelDaFax out of insolvency
 proceedings.
     "This is an apparent example of Deutsche Telekom's desire to take any
 measures required to restore its monopoly position in the German market," Mr.
 Phillips said.  "There was absolutely no risk involved in DTAG extending the
 deadline, as we were willing to pre-pay on TelDaFax's behalf.   This would
 have allowed our Board the opportunity to evaluate the complete funding
 requirements of TelDaFax.  It appears to be more than a coincidence that DTAG
 threatened to shut down TelDaFax on the very day that the acquisition of a
 majority interest in TelDaFax by a U.S. firm was consummated.  This seems to
 lend credibility to the concerns of U.S. regulators and certain members of
 Congress regarding the possible entry into the US market by DTAG, a majority
 of whose shares are owned by the German government.
     "This further evidences a potential failure of deregulation in the German
 market, where DTAG has practiced predatory pricing tactics, at the expense of
 its own financial results, in order to maintain market share.  In addition,
 DTAG has succeeded in getting the regulatory approval of charges to other
 service providers for billing and collection services that appear to be
 significantly outside the bounds of commercially reasonable terms.  DTAG also
 continues to charge other service providers for interconnection ports on an
 annual pre-payment basis, which is also not normal commercial practice."
     A receiver has been appointed by the German courts to evaluate the
 financial position of TelDaFax in an effort to organize a restructuring of its
 obligations.
 
     About World Access
     World Access is focused on being a leading provider of bundled voice, data
 and Internet services to small- to medium-sized business customers located
 throughout Europe.  In order to accelerate its progress toward a leadership
 position in Europe, World Access is acting as a consolidator for the highly
 fragmented retail telecom services market, with the objective of amassing a
 substantial and fully integrated business customer base.  To date, the Company
 has acquired several strategic assets, including Facilicom International,
 which operates a Pan-European long distance network and carries traffic for
 carrier customers, NETnet, with retail sales operations in 9 European
 countries, and WorldxChange, with retail accounts in the US and Europe.  World
 Access, branding as NETnet, offers services throughout Europe, including long
 distance, internet access and mobile services.  The Company provides end-to-
 end international communication services over an advanced asynchronous
 transfer mode internal network that includes gateway and tandem switches, an
 extensive fiber network encompassing tens of millions of circuit miles and
 satellite facilities.  For additional information regarding World Access,
 please refer to the Company's website at www.waxs.com .
     This press release may contain financial projections or other forward-
 looking statements made pursuant to the safe harbor provisions of the
 Securities Reform Act of 1995.  Such statements involve risks and
 uncertainties which may cause actual results to differ materially.  These
 risks include: inability to obtain adequate financing or financing on terms
 acceptable or favorable to the Company; inability to restructure existing debt
 obligations; potential inability to identify, complete and integrate
 acquisitions; difficulties in expanding into new business activities; delays
 in new service offerings; the potential termination of certain service
 agreements or the inability to enter into additional service agreements; and
 other risks described in the Company's SEC filings, including the Company's
 Annual Report on Form 10-K for the year ended December 31, 1999, as amended,
 the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
 2000 and June 30, 2000, as amended, the Company's Quarterly Report on Form
 10-Q for the quarter ended September 30, 2000, and the Company's Registration
 Statements on Forms S-3  (No. 333-79097) and S-4 (No. 333-37750 and 333-
 44864), and the Company's Report on Form 8-K dated February 21, 2001, all of
 which risks are incorporated by reference into this press release.
     World Access has filed a proxy statement/prospectus and other relevant
 documents concerning the TelDaFax transactions with the SEC.  WE URGE
 INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
 DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
     Investors will be able to obtain the documents free of charge at the SEC's
 Web site, www.sec.gov.  In addition, documents filed with the SEC by World
 Access will be available free of charge by writing to Investor Relations,
 World Access, Inc., 945 E. Paces Ferry Road, Suite 2200, Atlanta, GA, 30326,
 or by telephone request to 404-231-2025.
      The participants, as defined in Instruction 3 to Item 4 of Schedule 14(A)
 in the solicitation of proxies from the World Access stockholders for the
 approval of the transactions include World Access and Walter J. Burmeister,
 Kirby J. Campbell, Brian Cipoletti, Stephen J. Clearman, John P. Imlay, Jr.,
 Massimo Prelz Oltramonti, John D. Phillips, John P. Rigas, Carl E. Sanders and
 Lawrence C. Tucker, each a director of World Access.  Please see World Access'
 Registration Statement on Form S-4 (No. 333-44864) for a description of the
 World Access security holdings of each of the World Access directors.
 
     CONTACT:  Investor Relations of World Access, Inc., 404-231-2025
 
 SOURCE  World Access, Inc.

RELATED LINKS

http://www.waxs.com