World Access Allows Liquidation of TelDaFax In Light of Deutsche Telekom's Actions

German Incumbent Refused Company's Cash Payment;

Damage to TelDaFax Business is Irreparable



Apr 11, 2001, 01:00 ET from World Access, Inc.

    ATLANTA, April 11 /PRNewswire/ -- World Access, Inc. (Nasdaq:   WAXS)
 announced today that the Company's talks with Deutsche Telekom AG ("DT")
 regarding the obligation owed to DT by World Access' subsidiary, TelDaFax AG
 (Germany: TFX), have failed to reach a satisfactory conclusion in spite of
 World Access' announced commitment to fund that obligation.  Following several
 days of negotiations in which World Access indicated its intent to honor
 TelDaFax's debt to DT, Deutsche Telekom disconnected TelDaFax's circuits at
 mid-day on April 5, effectively cutting off service to most of TelDaFax's
 German customers.
     Over the course of the following days, World Access continued to offer DT
 payment in exchange for restoration of TelDaFax's circuits and pre-payments by
 TelDaFax for future services.  The Company was set to wire transfer DM 30
 million to DT on Friday, April 6, and was prepared to contractually commit to
 pay the remaining outstanding balance by the end of May.  An agreement
 providing for these payments and for the restoration of TelDaFax service was
 delivered to DT by the Company's German counsel on the morning of April 6, and
 would have provided for service to be restored by midday on Saturday, April 7.
 After delaying discussion of the agreement until Friday evening, DT abruptly
 suspended talks until Monday April 9, effectively eliminating any opportunity
 for TelDaFax circuits to be restored before Tuesday April 10.
     As a consequence of DT's apparent lack of desire to reach an agreement,
 and the resulting delay in reactivating TelDaFax service, World Access'
 management concluded today that irreparable harm has been caused to the
 commercial prospects of TelDaFax.  It is management's belief that the vast
 majority of TelDaFax's long distance customers have switched to another
 carrier, most likely DT itself, during the period that service has been down.
 As a result of DT's actions, TelDaFax, which filed for insolvency on April 2
 in an attempt to avoid cancellation of services with DT, is expected to be
 liquidated by the insolvency administrator appointed by the court.
     John D. Phillips, Chairman and Chief Executive Officer of World Access
 said, "On March 31, World Access committed to Deutsche Telekom that it would
 be in a position to guarantee funding of TelDaFax's obligations to DT by
 Friday, April 6.  We met that commitment.  Unfortunately, we now believe that
 it was never the intention of DT to come to a good faith agreement on terms
 that were in their financial interest as a creditor.  As a creditor, their
 interest was best served by full collection of past due amounts and prepayment
 for services until such amounts were collected.  This is what we agreed to
 provide, including an immediate payment of more than half of the outstanding
 balance.
     "As a competitor, however, DT's financial interest was obviously best
 served by recovering the vast majority of TelDaFax's customer base, and
 earning gross margins on that business which over time will be well in excess
 of the amounts owed by TelDaFax.  DT's actions clearly indicate to us that it
 would prefer to have its former customers returned and its monopoly position
 restored, rather than receive cash payments for TelDaFax's debt.
     "This is an obvious example of the failure of deregulation, when a former
 monopolist is allowed to favor its interests as a competitor over those as a
 creditor.  As long as competitive carriers are entirely dependent on
 interconnection with the former monopoly, there must be protections against
 this sort of self-serving anti-competitive behavior.  This action has not only
 destroyed the value created by the fine efforts of TelDaFax's employees and
 the capital contributions of its investors, but it has also dealt a serious
 blow to competition itself."
     World Access has engaged its German and U.S. counsel to evaluate potential
 claims to be brought against DT in Germany, Brussels and/or the U.S.
 
     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 U.S. 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.
 
     CONTACT:  Investor Relations of World Access, 404-231-2025
 
 

SOURCE World Access, Inc.
    ATLANTA, April 11 /PRNewswire/ -- World Access, Inc. (Nasdaq:   WAXS)
 announced today that the Company's talks with Deutsche Telekom AG ("DT")
 regarding the obligation owed to DT by World Access' subsidiary, TelDaFax AG
 (Germany: TFX), have failed to reach a satisfactory conclusion in spite of
 World Access' announced commitment to fund that obligation.  Following several
 days of negotiations in which World Access indicated its intent to honor
 TelDaFax's debt to DT, Deutsche Telekom disconnected TelDaFax's circuits at
 mid-day on April 5, effectively cutting off service to most of TelDaFax's
 German customers.
     Over the course of the following days, World Access continued to offer DT
 payment in exchange for restoration of TelDaFax's circuits and pre-payments by
 TelDaFax for future services.  The Company was set to wire transfer DM 30
 million to DT on Friday, April 6, and was prepared to contractually commit to
 pay the remaining outstanding balance by the end of May.  An agreement
 providing for these payments and for the restoration of TelDaFax service was
 delivered to DT by the Company's German counsel on the morning of April 6, and
 would have provided for service to be restored by midday on Saturday, April 7.
 After delaying discussion of the agreement until Friday evening, DT abruptly
 suspended talks until Monday April 9, effectively eliminating any opportunity
 for TelDaFax circuits to be restored before Tuesday April 10.
     As a consequence of DT's apparent lack of desire to reach an agreement,
 and the resulting delay in reactivating TelDaFax service, World Access'
 management concluded today that irreparable harm has been caused to the
 commercial prospects of TelDaFax.  It is management's belief that the vast
 majority of TelDaFax's long distance customers have switched to another
 carrier, most likely DT itself, during the period that service has been down.
 As a result of DT's actions, TelDaFax, which filed for insolvency on April 2
 in an attempt to avoid cancellation of services with DT, is expected to be
 liquidated by the insolvency administrator appointed by the court.
     John D. Phillips, Chairman and Chief Executive Officer of World Access
 said, "On March 31, World Access committed to Deutsche Telekom that it would
 be in a position to guarantee funding of TelDaFax's obligations to DT by
 Friday, April 6.  We met that commitment.  Unfortunately, we now believe that
 it was never the intention of DT to come to a good faith agreement on terms
 that were in their financial interest as a creditor.  As a creditor, their
 interest was best served by full collection of past due amounts and prepayment
 for services until such amounts were collected.  This is what we agreed to
 provide, including an immediate payment of more than half of the outstanding
 balance.
     "As a competitor, however, DT's financial interest was obviously best
 served by recovering the vast majority of TelDaFax's customer base, and
 earning gross margins on that business which over time will be well in excess
 of the amounts owed by TelDaFax.  DT's actions clearly indicate to us that it
 would prefer to have its former customers returned and its monopoly position
 restored, rather than receive cash payments for TelDaFax's debt.
     "This is an obvious example of the failure of deregulation, when a former
 monopolist is allowed to favor its interests as a competitor over those as a
 creditor.  As long as competitive carriers are entirely dependent on
 interconnection with the former monopoly, there must be protections against
 this sort of self-serving anti-competitive behavior.  This action has not only
 destroyed the value created by the fine efforts of TelDaFax's employees and
 the capital contributions of its investors, but it has also dealt a serious
 blow to competition itself."
     World Access has engaged its German and U.S. counsel to evaluate potential
 claims to be brought against DT in Germany, Brussels and/or the U.S.
 
     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 U.S. 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.
 
     CONTACT:  Investor Relations of World Access, 404-231-2025
 
 SOURCE  World Access, Inc.

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http://www.waxs.com