MEDIA RELEASE - September 7, 2000

Cable & Wireless Committed to Reducing Rates and Providing Quality Services

Cable & Wireless is committed to reducing rates for telecommunications services in the Cayman Islands. This has been shown by price reductions occurring in the past year.

In October 1999, Cable & Wireless reduced International Direct Dial rates in the Cayman Islands by over 25 per cent. Reduced rates for Dial-up and Direct Connect Internet services have followed this year.

Cable & Wireless made these price reductions despite the fact that long distance rates in the Cayman Islands currently subsidize rates for local telecommunication service.

The company has consistently stated that while it will work towards lowering international rates, it cannot reach levels that customers ask for until the charges for local telephone service are brought further in line with the cost of providing that service.

Cable & Wireless has presented rebalancing proposals to the Cayman Islands Government that would allow the desired reductions in International rates. They have not yet been approved.

In contrast, Cable & Wireless Jamaica has been able to rebalance its rates and, as a result, its international rates have been reduced. The United States has been going through rate rebalancing in the telecommunications sector since 1982, resulting in the much lower domestic long-distance rates seen advertised in the American media.

Despite this, the cost to make an International call to the Cayman Islands from the United States during regular business hours is not all that different than making a call to the United States from the Cayman Islands.

For example, placing a call through the MCI WorldCom service, a customer calling the Cayman Islands from Salt Lake City, Utah during regular business hours was charged an average of US$ 1.52 per minute as compared to the US$ 1.50 per minute quoted in a recent telephone rate survey as the Cable & Wireless, Cayman Islands rate to the United States.

In fact, International rates from the United States are considerably higher than the ten cents a minute advertised in the American media for domestic long-distance service and which is often mistakenly perceived to represent international rates.

The following table shows the standard non-discounted rate per minute charged for an International call to the Cayman Islands from the United States from the three largest American carriers.

(Source: Lynx Global Telecom Database, provided by Lynx Technologies Inc.)

Once the number of customers on discounted calling plans is taken into account, the average rate charged to AT&T customers - who make up 54 percent of all US bound traffic to the Cayman Islands - is US$ 1.11 per minute. (Source: U.S. Federal Communications Commission - FCC)

Cable & Wireless' average rate, after discounts, to the United States from Cayman is approximately US$ 1.18 per minute, which compares quite favourably to the average paid by AT&T customers.

In the Caribbean, International telephone rates have been falling throughout the region, even in markets where Cable & Wireless retains an exclusive franchise. The decreased rates have been a result of improving technology and the company's commitment to providing customers with lower prices.

Although the Cayman Islands Government has not yet approved re-balancing proposals, Cable & Wireless is the only local utility company to have reduced its rates in the past year. Costs for other essential utility services have been increased.

Statistics released by the Government Economics and Statistics office in June 2000 show that between March 1999 and March 2000 costs in the Communications sector decreased by 12.7 percent. Comparatively, Utility sector costs increased by 8.7 percent in the same time period.

It is difficult to make comparisons on International telephone rates in the Cayman Islands to those of other territories when no reference is made to the fact that the economic situation here is completely different to that in Jamaica or Dominica, for example.

The costs of living and of doing business in other Caribbean territories are often much lower than in the Cayman Islands. It is not fair to use a comparative analysis of the international telephone rates and not take local telephone charges and other day-to-day items into consideration. Additionally, the regulatory environments and constraints on rate rebalancing also vary widely from country to country within the region.

In the Cayman Islands, it is acknowledged that customers are charged at a premium for many goods and services. Consumer items ranging from groceries to gasolene are at much higher rates than in other territories in the Caribbean. For example, a gallon of gasolene in the Cayman Islands costs an average of US$ 3.12 per gallon, whereas a gallon of gasolene costs US$ 3.00 in Barbados, US$ 2.54 in Dominica, and US$ 1.80 in the United States. This comparison can be extended to other products and services.

Cable & Wireless is committed to providing customers good value for money and consistently seeks ways of reducing costs to it customers while improving service.

The recently introduced Smart Choice programme gives customers the opportunity to significantly reduce their international calling charges. For example, a Smart Choice customer can call the USA on the weekend for just US$ 0.60 per minute. During the week, that customer can also call the U.S. for US$ 1.20 per minute in the daytime, and for US$ 0.95 per minute in the evenings.

As part of its commitment to customers in the Cayman Islands, Cable & Wireless also continues to invest in the community. In the past three years alone, the company has contributed over $350,000 to community projects in the Cayman Islands.

Under its current sponsorship programme, Cable & Wireless offers free Internet service to all schools in the Cayman Islands through the Internet for Schools project, provides scholarships to young Caymanians seeking further education, and supports several worthy causes, including the annual Cancer Awareness Week, and the development of youth cricket programmes, among many others.

For more information contact:

Andrea Fa'amoe
Public Relations Manager
Cable & Wireless, Cayman
Tel: 1 345 914 0553
Cell: 1 345 916 6033
E-mail: prm@candw.ky

Cable & Wireless is a major global telecommunications business with customers in 70 countries. Its businesses around the world offer a range of services spanning broadband data, Internet and voice services. Cable & Wireless' priority for expansion is the fast growing market of IP (Internet Protocol) and data services for business customers. It is making major investments in developing advanced networks and services in the US, Europe and the Asia-Pacific region to build the world's leading global IP infrastructure. With the capacity of this advanced infrastructure and its presence in key business markets, Cable & Wireless holds a unique position in terms of global coverage and services to business customers.

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