ATC 0.00% 9.9¢ altech chemicals ltd

pre open, page-10

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    Pre-open till Tuesday (2 July). This followed a request by the Company which was communicated to the ASX this morning by telephone and subsequently confirmed in writing.

    Within the Asian theatre of operations, ATC has bilateral interconnection agreements in place in London and in Hong Kong.

    These agreements are with various global operators, including:
    1)
    Swisscom AG;
    2)
    SingTel;
    3)
    Taiwan Telecommunication Network Services; and
    4)
    MCI Worldcom Asia.

    The Worldcom exposure is limited (ie: not a high degree of inter-connection dependency here, not financial risk).

    The effect of the inter-connection arrangements is such that ATC and the other linked parties connect their switches to each other such that the virtual reach of their respective network coverage is expanded (ie: greater, on a connected basis, than on an unconnected basis).

    By virtue of these arrangements existing, ATC is able o switch customer traffic for termination destination outside of its own dedicated network (ie: for termination in a linked network, such as with SingTel's network in Asia).

    With Worldcom having filed for Chapter 11, uncertainty will surround the continuing accessibility /viability of the Worldcom inter-connect arrangements. But, if this were to be the case, then the bulk of Worldcom's inter-connect traffic in the Asian region will switch to other interconnect operators, including SingTel.

    In Singapore and throughout near Asia, Worldcom's Chapter 11 problems should prove a strong positive for SingTel. In this case, any adverse impact on ATC as a result of Worldom's potential demise should be balanced out as a result of SingTel's increased presence in the asian inter-connect market.

    Generally, Chapter 11 affords bankruptcy protection whilst allowing for the business to restructure itself onto a more viable footing. Hence, the net neutral impact to ATC (at least on this score).

    The new 12-month renewable contract with China Mobile, therefore, should not be impacted by this outcome (ie: the current capacity for ATC's monthly revenue stream to continue growing at its current rapid rate, albeit off a low starting base, should prevail).

    In any event, most of the China Mobile traffic (estimated, for purposes of the ATC working arrangements @10m voice minutes per month) should be carried on the SingTel Euro-Asia bridge (connecting Singapore, Hong Kong and London together) particularly for termination outside of Asia.
 
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